You’ve recovered from your New Year’s partying and are now ready to start tackling 2008. The best place to start is with taking a good hard look at your money. Finances are the most significant cause of stress in most people’s lives. Having a good year requires getting a good grasp on your spending. Here’s a five-step plan that you can put into action immediately to reduce your financial stress:

1. Create a chart showing all of your money owed. Debt causes financial stress so you have to get rid of it; you can’t do that if you don’t know the facts about it. The chart should include mortgages, credit card debt and school loans.
2. Review the interest on each of the debts on your chart. Your goal will be to eliminate the debt with the highest interest first.
3. Apply for new loans that offer lower interest. Transfer the balances from high-interest cards to these.
4. Make minimum payments on low-interest loans. Pay off bigger amounts to the higher-interest debts.
5. Every time you buy a personal item, put the same amount of money spent towards paying off credit card debt. This allows you to still get fun things while actively paying off the debt owed.

You shouldn’t have to spend your days worrying about your debt. Follow an action plan for eliminating it so that you can fill your days with carefree fun.

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