One Step at a Time

* The first step is a cliche: Admit you have a problem and commit to reversing it.

* Figure out just how deep a hole you are in. Order all three of your credit reports. All consumers are entitled to one free credit report from each credit bureau every 12 months. Go to http://https://www.annualcreditreport.com . (Do not go to http://www.freecreditreport.com/ -- that is not the official site.)

* If you think you have a serious spending problem, think about contacting outreach organizations such as Debtors Anonymous.

* If you are thinking about using a credit consolidation firm to lower your payments and interest rates, understand that you can negotiate on your own with creditors.

* To find a reputable agency near you, see http://www.debtadvice.org/ or call the group's automated hotline: 1-800-388-2227.

Be sure to check out the Justice Department's approved list of consolidation consultants: http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm .

* No matter which route you take, make sure you quickly devise a budget. Keep track of every cent you spend to understand where your money is going and where you can cut back.

* Use the savings from reduced spending to pay down debt.

* Be sure to save something for emergencies, even as you are paying down your debts. Experts recommend having at least three months of living expenses available.

* While many financial planners recommend first paying down the debts with the highest interest rates, some say there are psychological benefits to paying down the smallest balances first. That sense of accomplishment can push you to pay all of the bills faster.

* Pay all of your bills on time. Doing so can improve your credit score within several months.

* Keep an eye on retirement plans and think logically about them. For instance, look closely at whether it is economically feasible to save for your children's education at the expense of saving for retirement. Your children can get financial aid for college, but it's hard later in life to make up for a retirement savings shortfall.

* If you have children, consider involving them in aspects of your financial recovery. It will teach them valuable lessons about how to not mishandle their finances.

* Above all: Don't be afraid to ask for help.