The Christmas tree is rapidly losing its needles and the kids have already broken some of their new toys. These are the sure signs that the holiday season is coming to a close. Just about the only thing that is new is the stack of bills that arrive in the mail everyday. You spent too much money during the holidays and now you're in some financial hot water.

It does not have to be this way as there are a number of steps that consumers can take to repay their holiday debts and restore their financial health:

-- Make a New Year's resolution to: balance your checkbook each time you receive a paycheck to ensure that you are not spending more than the amount you make.

-- Keep track of your bills. Designate a filing cabinet or secured box for bills and financial statements. Make separate files for bank statements, tax documents, credit card bills, medical receipts, mortgage statements and other records. Keep up with the due dates for bill payments.

-- Create a monthly budget. Your budget is your spending plan. To create a budget plan, determine your monthly income and recurring expenses like rent or mortgage payments, utility bills, food, transportation costs, tuition, savings, entertainment and personal grooming. Then identify other recurring and periodic expenses like clothing, household appliances and maintenance, gifts, credit card purchases and vacations.

-- Prioritize your expenses and spending. After writing down your expenses, prioritize each expense based on your needs versus your wants. Set spending limits and determine estimated costs for each expense. If additional funds are left over after all monthly expenses are paid, split the rest of your income between debt reduction and savings. Pay down high interest credit card bills and loans, which will save you money over time. Use extra funds to also increase your savings –- its good insurance for unplanned emergency expenses. Look for ways to reduce daily spending: take lunch to work more often and look for movies during early matinees instead of evening showings.

-- Develop a diversified savings plan. Savings should not be limited to retirement planning. It's important to save for a down payment to purchase a home or vehicle and other items like uncovered medical expenses. Make regular deposits in an interest-bearing savings or money market account to cover these costs. And be sure to take advantage of employer sponsored benefit savings, such as retirement accounts and flexible spending accounts which help cover uninsured medical costs and lower the taxes you'll pay on payroll income.

-- Recognize the early warning signs of debt trouble. You're behind on the basics, like January's mortgage or rent and utilities. You're using credit to buy items you should be able to buy with cash, like groceries. You're skipping some debt payments to make others. You're receiving overdue notices or telephone calls from bill collectors. More than 25 percent of your take-home pay is being used to pay back credit card debt.

-- Don't suffer in silence, take action and get help. Call your creditors or seek helpful credit counseling. Don't be afraid to call your creditors. As soon as you know you're going to have problems contact your creditors and explain your situation and what you're doing to meet your debt obligations. Depending on the creditors' policies and your situation, credit and payment history, you may be able to negotiate your next payment or a lower interest rate. Remember, your creditors would rather keep you as a customer than lose you to bankruptcy or foreclosure.

Consumers should review credit counseling services carefully, before choosing help. Find out if the agency offers money management advice without signing you up for a debt repayment plan. Ask the agency to explain their fees, services and national affiliation. Find out if they are a member of the NFCC, which signifies that the agency offers quality, reputable services. Check the agency's Web site or the NFCC's Web site at: http://www.nfcc.org for additional questions to ask before entrusting any organization with your financial future.

--- The NFCC, founded in 1951, is the nation's largest and longest serving national nonprofit credit counseling organization. The NFCC's mission is to set the national standard for quality credit counseling, debt reduction services and education for financial wellness, through its member agencies. With more than 1,000 community-based offices nationwide, NFCC members help more than a million households annually. For free and affordable confidential advice through an NFCC member, call 800-388-2227, or visit http://www.nfcc.org.

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Source: usnewswire