You found that great gift for Aunt Sally, Uncle Bill and little Louie. Now here come the bills. Do you find your paycheck going for bills and feel like you cannot get ahead? Take some action and you can get out of debt.

Step One: Collect each bill and write down the balance, minimum payment, and interest rate.

Make a list of everything you pay in a month. Include rent, utilities, credit card bills, mortgage interest, etc. Now keep a log of how you spend your money. How much for gas, transportation, food, medical, insurance, clothing, household expenses, entertainment and everything else?

Step Two: Develop a plan to decrease your spending. Now that you know where your money is going, look at your expenses and see if you can find an alternative. For example, if you buy lunch out at work, prepare you lunch at home and take it with you. No time? Try a frozen entrée. Do you drive to work? Try to carpool or take the bus. Get some quotes for your insurance. It is always a good idea to get quotes when your insurance renews. Do the same thing for your cell phone service. Plans have gotten very competitive now and you may be paying too much. Know when your contract is up. Call your provider and see if you are eligible for a cheaper plan. When it comes to gifts, do something for the person instead of spending money. Clip coupons and shop sales. Make it a rule to refuse to buy anything that is not on sale.

Step Three: Look at your credit card bills. Which one has the highest interest rate? Pay extra on the highest rate card. Eventually you will get it paid off. Then start on the next highest card. Stop using credit cards unless you can pay off the new purchases each month. Did you know that people spend more if they are paying with credit? Try using cash for your purchases. If possible switch the balance to a lower interest rate credit card.

Step Four: Pay yourself first each month. Start putting aside a small amount every payday toward an emergency saving account. Use the money you saved by changing your spending habits. This will grow.

This is a long process but be faithful to it and you will be on the road to financial freedom. As you pay off your credit cards, you will be able to save the interest that you are paying. Good luck. You’ll be glad you did it.