1. Take control
There comes a point where you have to admit that your debt is defeating you. You can’t keep up with repayments; the interest charges are mounting up and, maybe even worse, you’re using one loan to pay off another.

You have to take control of your finances: if you don’t your creditors will. If you are in denial about this you need to face the truth. If you can face the truth and take control, you’re on the first step to beating debt.

2. Live within your means
Take a look at your credit card and charge-card statements. What did you spend that money on?

Go round your house and take a good hard look at the goods that you bought with those credit cards. Are they worth it? Did you want them that much? What difference have they truly made to your life?

What do you feel like when you look that stuff and say to yourself, ‘I haven’t paid for that (xxx) yet’?

3. Reduce your stress
Debt can become a nightmare and stress can send you into a spiral of despair. It doesn’t have to be like that. There’s a way out but it’s not an easy way out. You have to take control of yourself and your spending, and resolve to get your life back. When (and only when) you’ve got that mental resolve, then consider consolidating your debt.

4. Eliminate your debt
Consolidating your debt is a one-chance option of repaying your debt. The debt doesn’t disappear, but all the various loans and debts get lumped together into one bigger loan to be paid off over a longer period and at a lower interest rate. This frees up some of your income and will instantly reduce your stress.

And, crucially, you shouldn’t continue to rack up credit card debts. You will only eliminate your debt if you live within your means.

Try an experiment. Leave your credit cards at home for a week and live on cash. Pay for everything with money – yes, everything. This will help you get a handle on your need to budget. When you see the money slipping through your fingers it will bring home the reality that your supply of money is limited.

At the end of the week, ask yourself how you feel. If it was difficult but you succeeded in prioritizing your spending, congratulations – you’re in control! If it was hard, or impossible, then try again. You need to be tough with yourself to be in control of your money.

5. Getting your life back
Happiness is not being able to buy useless luxuries: it’s about being free. Cut up all but one of your credit cards, and pay back that credit card every month, without fail. You’ll enjoy the things that money can buy only if you spend money that you have – not money that you borrow. Resist the temptation to indulge yourself with money that you don’t own.

Money has the power to enslave you as well as making you free. When your debt is out of control, you’re enslaved. You can become free only if you take control.

Some debt is good for you. For example, what you owe on your home can provide a nice way to balance out your income tax. A little debt is not a bad thing either as making regular payments to various creditors helps build your credit rating which makes it easier for you to obtain loans at good rates. However the truth is that most Americans have more than a little debt — and many owe far too much money and are already, or soon will be, in financial trouble as a result.

Finding yourself owing a lot of money is not the end of the road and you can stop your cycle of debt by taking four positive steps to break the cycle.

First, attack your high-cost debts. This likely includes credit cards where you may be paying high minimum payments and high interest rates. Pay off the balances on credit cards carrying the highest interest rates first. Continue making your minimum payments for lower-interest cards but concentrate on paying off the highest interest. When the high-cost cards are paid off then work to eliminate the balances on your other cards.

Second, reach out to your creditors. If you are going to be late or have difficulty paying your minimum payments then contact the credit card company. Even if you can make all your payments in a timely fashion there are two benefits you can reap from contacting the card issuer. First, you may be able to negotiate lower rates or more favorable terms. Second, they might be able to recommend alternatives that can minimize damage to your credit rating.

Third, consolidate your debts as much as possible. You can accomplish this a number of ways. One possibility is simply transferring balances from one credit card to another with a lower rate, but be aware of transfer fees before choosing this option. Another possibility, if you own your own home, is to take out a home-equity loan or line of credit which should have a lower interest rate than most credit cards can offer as well as offering tax deductions. Finally, you can also consider a secured loan offering the value in another form of property, your vehicle for example.

Fourth, don’t sacrifice your retirement savings. Obviously paying off your debt should be a high financial priority but cutting what you save for retirement to do so may not be the wisest course — especially if that becomes a long term habit or if you are losing out on your employer’s matching funds as a result. Perhaps you may be able to borrow against (or from) your retirement funds at a lower interest rate which will allow you to continue to save for retirement while also getting out from under your debt.

While owing money may well be the American way it can also be a tremendous burden to bear. You can shed the weight of your load or at least trim it down to a more manageable level by taking these four steps.