Welcome to the Debt Support Group's "Snowflaking Challenge". This challenge is based on the ever popular "Snowballing Method" of debt reduction.

Sometimes we find ourselves in over our heads, and we are too overwhelmed to even think about our debt. When we get like that, we tend to stop opening the bill envelopes when they arrive and we lose focus of how much we owe to whom. It's important to take charge (no pun intended) of your situation! The following steps will help you reduce your debt quickly and methodically.

1. First and foremost - stop charging! Take the cards out of your wallet and forget they exist. You can stash them in a drawer, freeze them in a bowl of water, or chop them into teeny tiny pieces. Just stop using them.

2. Sit down, and make a list. List all of your credit cards, loans and other debts, the current balance of each, the finance charge percentage of each, and the minimum amounts due each month for each debt. Welcome to your reality. It may not be pretty, but now that you know what you're dealing with, you can fix the problem.

3. Figure out how much TOTAL money you have each month to apply to your debt. You may find that you need to live considerably below your means for a while in order to do this effectively. Do it. It's time to get to know yourself and learn how precious little you really need to survive each month. Remember the Ramen noodles and Mac and Cheese nights growing up...they're back...but only for a short while!

4. Look at your chart and find the account that has the highest interest rate. That's who is going to get most of your allotted money each month. Be sure to pay everyone else the MINIMUM amount due to each of them. Everything extra goes to the account with the highest interest rate (feel free to call your creditors and try to reduce the interest rates on all your cards. Your creditors may surprise you and work with you.)

4a. Sometimes, in lieu of step #4 above, some people prefer to put their extra money to the account with the lowest BALANCE rather than the highest interest rate. There is a psychological boost to paying off a card and getting rid of it forever. While step 4 makes the most sense in a pure, money, interest rate, raw numbers sort of way, using step 4a may help you stay on track and focus because you will start knocking accounts off quickly due to their smaller balance.

5. Once you have paid off your first account, take all the money that you were paying to that account, and roll it over and ON TOP OF the money you have been paying to the next account in line for pay off.

6. Keep rolling your funds over as each account becomes paid in full, and eventually the money that you're "snowballing" to each new account in line will help you get rid of your debt very quickly.

There is a great resource on the web if you want a "roadmap" of your debt reduction plan. Check out the Quicken Debt Reduction Planner http://www.quicken.com/shopping/debt/ You can enter your information here, and see how fast you will be out of the red and in the black!