1. It is important to make a budget. Calculate the money you are bringing in each month and the amount that you must spend on bills and other essential items. Knowing how much extra money you are working with each month will help to decide how much you may be able to save and what you have to spend each month. Try to take $20 extra out each week for a rainy day. This extra $1000 a year can come in handy in case of an emergency.

2. Your next step should be to try to cut spending as much as possible. Stop carrying credit cards with you and stop spending your free time shopping. If you start making coffee at home instead of picking up a premium cup at a local coffee shop, you can save a large chunk of cash each month. The simple things that you treat yourself too may have to be cut out in order to reach your financial goals.

3. Try to track your daily spending and figure out where you can make cuts. When you go shopping make sure to have a shopping list and follow it as closely as you can. Impulse buying when you are out looking around can add up quickly.

4. You should also short-term goals to make sure that you keep progressing. Make a six month, monthly, and even weekly goal to pay off certain amounts in that period of time. Make your goals reasonable while also trying to stretch every dollar to have.

5. If possible, take a second job. Update your resume and put it up on the web. Find something that will work with your current schedule and earn you some extra cash.

6. It is smart to pay off your high interest loans first. If possible try to consolidate all your payments into one with a low interest rate.

7. Another way to help is to pay bills online automatically. It will help to improve your credit score in the long run because the payments will always be on time and paid in full.

8. It is a good idea to find out what your credit score is. Even if the total amount of debt is not going down very quickly, as long as you are paying your bills on time then your credit score will show improvement which is important in the world today.

9. Credit score errors should be checked for as well. At least once a year search for errors on your credit report and contact the responsible agencies to correct the errors. Fixing the errors that may be present will help your credit score as well.

10. Improving your knowledge in personal finance will help you get back on track and help you stay out of the red in the future. Educate yourself in philosophies and strategies related with saving. Find the areas that you were having trouble with in the past and focus on them.

Losing a job, getting a divorce, a serious illness, an accident, and even acts of nature can drastically affect you financial standing. With these ten steps toward financial recovery you should be able to work toward becoming debt free and have an easier time saving afterwards.