If your income is not enough to cover all your expenses, you must either cut your expenses or increase your income. You'll find that it's usually easier to cut spending than to increase income. You don't need to make drastic changes, but you must make some effective cuts that will allow you to pay your bills. First, cover the bills you must pay (mortgage, utilities, loan payments, credit card) and money for necessities (food, clothing, insurance). Then, focus on non-essentials - areas where you can afford to cut back.

Easy ways to cut expenses
The following are some simple ways to cut expenses. They also work if your bottom line is positive.

• If you visit restaurants and order takeout often, consider bringing lunch from home and saving restaurants for special occasions.
  
  
• You can even reduce a "fixed" expense such as your electric bill by conserving energy. Turn off the air-conditioning one hour earlier than usual. Iron your clothes at the same time. Make sure all lights are turned off when you leave a room. Switch to small screw-in fluorescent bulbs which last at least five times longer than incandescent bulbs and use only about 40% as much electricity. If you add up how many bulbs you have in your home, that savings becomes significant.
  
  
• A regular meal of coffee and rice toppings at a fast food outlet every morning can cost around P100 per workday. That's nearly P24,000 per year. If you're married and your spouse has the same habit, that's almost P48,000 per year.
  
  
• If you smoke, think about giving it up. Besides the health benefits, you could save at least P10,000 per year by quitting a pack-a-day habit.
  

Getting out of debt is tough. It also takes time. Most people need a year or two to escape from debt. But you can do it if you stick with it. Remember, the discipline and techniques you learn by solving your problems will benefit you for the rest of your life. Getting out of debt feels good. Staying out feels even better.