The dismal economy is having an adverse effect on people around the globe with millions facing tremendous amounts of debt. For many, escaping their debt seems like a far off dream but it doesn't have to be! By applying a few simple guidelines to your spending habits, you can begin to reduce credit card debt today.

* Take Inventory of Your Finances

The first thing you need to do is to take an inventory of all income and expenses. Start by gathering up all of your bills such as utilities, credit cards, loan statements and all regular expenses as well as salary and other income information. Be sure to include your grocery and other basic necessity spending so that you can see exactly what is coming in and what is going out. Write it down by category and see which items are really necessary. This will give you a complete picture of your financial situation.

* Create a Budget

Now that you have gathered your financial information and documented it, it is time to sit down and create a budget that you can live with. Be honest with yourself about how much you actually need for each item in your budget and cut out those things that aren't really necessary. One of the fastest ways to reduce unnecessary spending is to make a list before you go grocery shopping. While you are at the market, avoid impulse buys and other spur of the moment purchases. You will be amazed at how fast these purchases can add up. Stick to your list and do not deviate from it. Be sure to keep a list of cash transactions as well and always ask for a receipt.

* Track Entertainment Expenses

For many, two of the biggest expenditures are dining out and entertainment. Instead of heading to the theater to see the latest block buster, for less than the price of one ticket you can rent a couple of movies, make popcorn and enjoy some time with your family. Cut the amount of times you dine out to once or twice a month instead of several times a week. Little things can go a long way in reducing expenses. Use the money you save to pay down your credit card debt!

* Communicate With Creditors

If you have made a sincere effort to realign your budget but find that you really can't afford your current payment amounts, contact your creditors! They are usually willing to work with you to set up a payment plan that you can afford rather than have your account end up in collections. Communication is imperative in protecting your credit rating. Don't be embarrassed to call them. Millions of people are in the same situation that you are in right now but not all are taking a responsible approach to their problems. Your creditors will appreciate the fact that you are trying to honor your debt to them.

* Pay Yourself Too!

Once you have trimmed your expenses you will have more money to work with but remember, you need to pay yourself an allowance too! A large percentage of what you reserve for yourself should be put in savings to protect you in case of an emergency but you also want to give yourself a small treat as a reward for your hard work. It does not need to be anything extravagant, but this way you will not feel deprived while everyone else is being paid your hard earned money.

Getting started is the hardest part of any journey and the longer you wait the more difficult it will be. Take the first step today and begin your journey to debt freedom!