Debt management plans are designed to get you from point A, hopelessly in debt, to point B, back in control of your short-term debts. A debt management plan can be as simple as a five-year calendar on the kitchen wall that outlines each monthly payment until all of your debts are cleared. A debt management plan can come from a financial planner, consumer credit counseling agency, or a debt management company.

Having a written, concrete plan of action to get out of debt is essential for your financial success. It serves as a map and compass during the financial storms that are sure to arise in your life. A debt management plan should also contain some form of financial education. Without retraining your spending habits, you are likely to recreate another excessive load of short-term debt.

Elements Every Debt Management Plan Should Include

The following tips and rules for creating a debt management plan will help you stay on track during your rehabilitation period.

• Mark off a start date, halfway point, and an end date. You can celebrate your halfway mark and the end of your rehabilitation with a special treat like a family dinner out, or a trip to the movies, but these extravagances should be avoided otherwise.
• If you are using a debt management company, make sure the terms of the program are clearly defined. Mark off the payment amount and due date each month on a calendar.
• Keep track off all receipts and track your expenses as well as your compliance with your budget. Do this at least once a week during your rehabilitation.
• Hold weekly family meetings and brainstorm for ideas on how to save money. Write down your ideas and try to institute a few new ones each week. Make a habit of researching money-saving tips during your rehabilitation. Clip coupons, eat meals at home, pack a lunch for work, eliminate your cable television subscription, or carpool to work. New money saving ideas can be found at your local library, online, and from asking friends and family members.
• Learn how to manage your money better. This does not include learning how to increase your income- only learning better spending habits. Increasing your income begins after you learn healthy money management techniques.
• Revise your family budget every three months. Look for ways to tighten the budget, and tweak any areas that show improvement. If your clothing allowance is $100 a month and you are consistently spending only $50, it is time to adjust your budget.
• Find new ways to reward yourself without spending money. This helps develop a healthy spending habit and removes the sense of entitlement that often leads to over-spending. Write down these rewards and keep them handy. You can even print them on a small card that fits into your wallet to avoid the temptation to use your credit cards.
• Do not apply for new lines of credit during your rehabilitation period.

Be Patient and Persistent
During your debt management plan, you are slowly retraining your family’s attitude about money. Your spending habits, attitude toward saving and investing, and your personal value of a dollar are all being transformed. It is important to remember that you will slip up in the beginning and that change will not happen overnight. Habits take time to develop. Be patient and forgiving, but stick with the program!

Set Regular Goals
Set specific personal and family goals each week and track your progress together. Involving the entire family is essential. Your children are less likely to bug you for another pair of shoes or a new skateboard if they understand the debt management plan goals and become excited about being debt free. This process will also help your children avoid acquiring large debts of their own.

Money management is a learned behavior and is best modeled by knowledgeable and responsible parents. Goals that are met can be rewarded with privileges such as control of the remote control for the evening, a free pass for skipping a day’s worth of chores, or favorite meal or dessert. Unmet goals that continue for more than two weeks might receive an extra turn at washing dishes, washing the dog, or performing lawn care.

Find A Mentor
If you struggle with unhealthy spending patterns, find a mentor. A financial mentor will hold you accountable for your spending habits and provides an understanding ear when the urge to spend strikes. A good resource for chronic over-spenders is debtors anonymous. Do not be afraid to seek out help and support as you learn new money management skills through a debt management program.

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