Ashley,

Often, one of the consequences of Christmas overspending can be discovering that we are in debt or deeper in debt than we expected. Credit card bills show how much those presents really cost us and now we have to figure out how to pay for all our purchases.

How would you describe your debt situation? Seventeen percent of Americans are in the hole, deep in debt with little hope of climbing out. Twenty percent describe their financial position as precarious. Forty percent take on debt but claim to always pay up on time, and 23 percent boast that they are debt free. Collectively, we owe more then $1.266 trillion in non-mortgage debt - roughly $5,000 for every American.

Why did you fall into debt? More than half of those in debt - 52 percent - blame their predicament on poor money management. The rest say a “life event” such as a divorce or medical problem propelled them into the red. (Bernice Kanner, Are You Normal about Money?, 88.)

Quick Cents Application Points:

1. Add up all your non-mortgage debt to get an accurate picture of the amount of debt you currently have. Does the amount surprise you? What percentage is this amount of your income?
2. Discuss how you accumulated this debt.
3. What can you implement today to start reducing your debt so you can become debt-free?