Figure out what your monthly expenses are. This is the third thing you have to do.

Now that you have figured out what your net worth is, the next step is to figure out what your monthly expenses are. They key thing here is that you have to spend less money than you make. Every month that you spend more then you make, that deficit will accumulate to your total debt.

Figuring out what you spend money on may be easy or difficult depending on how you pay for things. If you use the same credit card to pay for every single transaction, you can simply log in to your online banking and look up your credit card statement for the last 12 months. When you analyze your spending habits, you want to take a look at as large of a data set as possible so you can get as accurate a picture of what expenses you incur. Typically, the amount of money you spend on gas, groceries, or rent will stay consistent month to month. You want to look at a long period of time because there will be some events that don't happen on a monthly basis but are quite expensive. Some examples include your car breaking down and needing repairs. Tickets for traffic violations are unexpected and could run a few hundred dollars. Some people enjoy taking vacations and traveling to other countries. It may be a good idea to look at your credit card statements for as far as five years into the past.

If you don't have a credit or debit card, I would recommend just buying a notebook and recording every single transaction on a day by day basis. I actually prefer this approach because it makes you think about every single transaction at least twice (once when you buy it and once when you record it) and you can easily check if you are on track for the current month.

With enough real data, you can get a good estimate of your living expenses. After getting the estimate and studying your spending habits, you will know how much money you spend on groceries, gas, rent, maintenance, and student loan debt.

I focus on expenses a lot because your income will be much more consistent if you have a salaried job. It is your goal to make sure that every month, you are in the black. You aren't spending more than you make. This is crucial if you have several thousands of dollars in debt. The reason for this is that borrowing money isn't free.

In almost all cases, loans come with interest charges. The longer it takes to pay off your debt, the more interest you will have to pay off. It is for this reason it is a good idea to pay off credit card balances in entirety on a monthly basis as the interest rate for credit cards can be anywhere from 8 to 20%.

After you get a good estimate of what your monthly and annual living expenses are, the next step is to set some goals and make a plan. The first goal I'd recommend is getting out of debt.