Reducing debt usually isn't a high priority for people until they have already gotten into trouble with overspending. Using a few basic guidelines, and debt calculations, can help you see when your debt load is getting into the danger zone.

First off, creditors use budgeting guidelines when reviewing and approving credit. If your debt exceeds the financial communities recommended guidelines, then you have a higher risk of credit applications being denied.

Getting, and keeping, your debt in line with recommended budgeting guidelines, is an important step in when reducing debt. Use the following recommended budgeting guidelines (the same ones used by Financial Institutions) to review the items in your budget:

• Housing 35% - Mortgage or rent, taxes, repairs, improvements, insurance, and utilities
• Transportation 20% - Monthly payments, gas, oil, repairs, insurance, parking & public transportation
• Debt 15% - Credit cards, personal loans, student loans & other debt payments
• All other expenses 20% - Food, insurance, prescriptions, doctor & dentist bills, clothing & personal
• Investments & Savings 10% - Stocks, bonds, cash reserves, retirement, rental real estate, art, etc.