With the onset of December comes the season of shopping, the season to celebrate, the season of holidays. But once the New Year Eve is done with, we are hit by the bank statements or mails asking us to clear the bill payments. If you have not followed the holiday shopping tips of purchasing with cash, then you are seriously going to fall prey to the so called holiday credit card debts.

To get out of such credit card debts you need to proficiently manage your finances along with an effective plan of action to become debt-free. The first step towards this plan should be to evaluate all your income and debts with priorities on each.

Step 1: Prepare a list of all your bill payments and sort them out into specific groups like the credit card bills, mortgage bills, medical bills, or any other bank statements.

Step 2: Next, prepare a monthly budget for yourself. For this, you need to distribute your salary for the basic needs first. Do keep in mind that you should not use gross salary figures but instead need to use the actual take-away home figures. So you fix up your monthly budget for basic needs like food, transportation, monthly rentals/ mortgage, etc. After all these, you can then assign some budget for clothing, holiday trips, or any other unimportant purchases. Once your spending budget is ready, and you still have some money left, you can divert this amount to clearing off your debts or pending payments. But if you realize that after fulfilling your basic needs you do not have a penny to pay off your debts, then you are definitely facing severe crisis and need to consult a chartered accountant or a financial analyst on urgent basis.

Step 3: However, if you do have resources left after this budgeting, you should efficiently use them to clear the debts. You must also be cognizant of the fact that along with clearing off the debts, you ought to do some savings. These savings will help you to not get under the debt-clouds in any emergency situations.

Step 4: You should always be proactive by being highly alert to any signals of debt hitch. Also, never skip certain debt payments to fulfill other debts. if you do so, you are on the threshold of entering the vicious circle of debts.

By following these simple yet vital steps, you can be debt-free and can secure your near future successfully.