According to Dave Ramsey's The Total Money Makeover, the self professed money expert claims being in debt is normal and we all should be weird. He has 7 basic concepts or "baby steps" for becoming weird. Don't let baby steps convince you that these are easy.
So just what are the baby steps?
1) 1000.00 in an emergency fund
a) The 1k is not savings - Cashflow that is readily available for true emergencies
b) No new debt - no credit card charges, car payments, etc
c) Zero balance budget - give every dollar a job. If done correctly, there are no more "emergencies" because there's an envelope with cash in it to cover whatever it is.
2) Use the debt snowball
a) Sort your credit cards balances in order of the least to most owed
b) Pay all extra snow onto the lowest balance until paid off
c) Once CC#1 is paid off, apply everything you have to CC#2 including the minimum from CC#1
d) Most importantly, generate more snow. Sell something on Craigslist or eBay, pickup some overtime, get a second job, etc.
3) Finish the emergency fund. Add to the 1k and build up 6 months worth of household income. If you haven't at this point I would change from a checking account to something that pays decent interest.
a) Accumulate 6+ months worth of savings
b) Save up to pay cash for a newer car (if needed)
c) Take a vacation paid for in cash (you've earned it)
4) Invest 15% of total house income in your 401k and/or start a Roth
5) Payoff the mortgage early or save up to buy a house
6) Kid's college funds
7) Build more wealth and give it away
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