Start with a complete financial snapshot. List every debt, every asset, every monthly expense. I know it's uncomfortable, but you can't build a recovery plan without knowing exactly where you stand. We use a simple spreadsheet system that most people can complete in about two hours. The relief of having clarity often outweighs the initial stress of facing the numbers.

Both approaches work, but it depends on your personality and situation. If you need quick wins for motivation, pay minimums on everything and attack the smallest debt first. If saving money is your priority, focus extra payments on the highest interest rate debt. Most of our clients who stick with their plan long-term choose the psychological boost of early victories.

Build it around your actual spending patterns, not ideal ones. Track everything for two weeks first, then create categories based on what you find. Include a "miscellaneous" buffer of at least 10% because life happens. The budgets that work are the ones that account for your real habits and give you room to breathe while still moving toward your goals.

When you're juggling multiple payments with different interest rates and struggling to keep track. Consolidation works best if you can secure a lower overall interest rate and resist the temptation to run up new debt on cleared cards. It's a tool for simplification, not a cure-all. We typically recommend it when someone has more than four different debts and a stable income.

Pay everything on time, every time. Keep old accounts open even if you don't use them. Keep credit utilization below 30% of available limits. Check your credit report quarterly for errors and dispute them promptly. Time is your friend here – positive payment history takes months to build, but it's the foundation of good credit. Most people see meaningful improvement within 6-12 months of consistent effort.

Contact your creditors immediately. Many have hardship programs that can temporarily reduce payments or pause interest. Don't wait until you're already behind. Australian banks are required to consider hardship requests, and they'd rather work with you than chase you. Document everything in writing and keep records of all communications. Sometimes a three-month breathing room makes all the difference.