Racking up debt is a familiar practice for Tara Nitz, a graphic designer from Minneapolis.

7 Tips | Debt FAQ | Consolidate

"(I have) school (loans), car (loans), credit cards, and right now I even have loans out for dental work and new glasses that I couldn't afford," the 30-year-old Nitz said. "I've never been an excessive spender, but I always seem to be chasing a finish line that gets further and further away."

While the holiday season is a time of spending, looking at past credit card statements can reveal that expenses also add up throughout the year for many of us. Instead of continuing that cycle, why not resolve to shrink your balances and get out of debt in 2007?

Sandy Shore, manager of counselor training for the New Jersey-based nonprofit financial counseling agency Novadebt, says reducing debt is attainable for anyone, as long as you take a proactive approach.

"The first step is to know where your money is going," she said. "For most people, this means tracking and recording every expense. Once you know what you are spending your money on, you can make the adjustments necessary to apply more money to debt and stop using debt to finance current expenditures."

Novadebt suggests tracking expenses for a full three months -- including bills, necessities and miscellaneous spending -- which can be used to build a budget.

Nitz said knowing what she spends and then how she pays off her debt has been her biggest financial roadblock.

"Mostly, my downfall has been my own ignorance," she said. "I'm the artistic one in the family and have always been horrible with math and numbers. Dealing with balances and interest rates is almost a fear of mine that I used to think would go away and fix themselves."

Like Nitz, many of Novadebt's clients originally avoid specific numbers, which typically makes paying off debt -- a concrete amount -- difficult.

The organization suggests quantifying both the amount of money you owe as well as the amount of money you have coming in. Vagueness, Novadebt said, will make a financial situation seem worse, especially if you think you owe "a lot of money." Once the amount of debt and the resources available are tallied, it is easier to make goals to wipe out that debt.

Shore added that while making more than your minimum required monthly payment is key to reducing your balances, consumers should have savings goals, both for purchases and financial emergencies.

"People tend to put any extra money they have toward paying credit cards. Then if an unexpected event comes up, they have no emergency fund and turn back to using their credit card," Shore said.

In those cases, once a credit card's balance is reduced, there's a chance you might start ringing up more purchases on it if there isn't a safety net.

"If you really want something, set a (savings) goal for it. Buy it when you reach the goal," Shore said. "Start an emergency fund and deposit an amount into it every paycheck. No matter how small the amount, you will be moving in the right direction.

"It may take a little longer to get out of debt, but you will break the credit card habit and stay out of debt."

There are a number of zero percent and low-interest rate credit card offers this time of year. Shore said that before jumping on one -- or many -- of these deals, make sure to read the fine print. Many have hidden transfer fees, which can negate the point of transferring.

If you do open a new credit card account, be sure to treat it like a loan and not use the new card for purchases, because most of them have two interest rates -- a low one for the transfer and a high one for new purchases. When making payments, that money is applied to the low-rate transfer until it is paid off, and the new purchase amounts collect interest.

While Nitz said it seems like eliminating her debt is a long way off, her resolution to focus on reducing it is the first step to financial freedom, according to Novadebt.

"I've made a budget, which is a first for me. Lately, I've thought twice and said 'no' to a lot of things that I really don't need. It really does all add up," she said. "I definitely won't find a stack of money laying around anywhere soon, but at least I won't make the problem worse in 2007." More resources:

• Avoid Temptation To Break Your Budget
• Dealing With That Four-Letter Word: DEBT
• Novadebt
• Help! I'm Drowning In Debt
• Bankruptcy Basics
• Digging Out Of Debt
• KPTV.com's Debt Management Section