We have too much debt in the country, our government’s spending has reached record levels and consumers have racked up more than $115 billion in credit card debt in the past three years alone. 

Let's make 2014 the year that changes that!

Americans’ debt situation has gotten better recently, with year-over-year improvement in six out of the past seven quarters.  But we still racked up around $33 billion in new debt during 2013 and are expected to do roughly the same in 2014.

In short, we need to progress from building up debt at a slower pace to paying it off.  We need to end our overspending habits, reclassify certain luxuries that have become known as necessities and start saving some money.

No one says paying down debt is going to be easy, but here are five resolutions that will help you lead a debt-neutral lifestyle in the new year:

Cut $300 From Your Monthly Bills:  No matter who you are, you can cut some fat from your monthly bills.  Start by putting all of your accounts on the table, including your credit card, bank accounts, mortgage and insurance policies.  Re-familiarize yourself with their terms and compare offers online to see if there are any better deals available.  If the juice of switching is worth the squeeze, go ahead and pocket the savings.

Set a Budget.  Too few of us aren’t aware of the exact relationship between our income and spending habits, and that’s one of the main reasons the average household now owes $6,700 to their credit card company, according to CardHub data.  After all, surveys from the National Foundation for Credit Counseling show that only 2 in 5 people keep close track of their spending. 

It’s time to review your credit card and bank account transaction history and get an exact number of how much you’re spending each month.  Then try to honestly evaluate each individual type of recurring expense using this rule of thumb:  If you don’t absolutely need it to survive, then it’s probably not worth going into debt to have.  Allocate funds to the necessities you identify, and then determine how much you want to contribute to debt payments as well as your emergency fund each month.

Build an Emergency Fund.  In constructing your budget, it’s important to recognize that building some savings is actually a higher priority than paying off debt.  Sure, finance charges are a drain, especially when you’re stuck paying a credit card’s high APR.  But you don’t want to painstakingly pay off what you owe, only to lose your job or get hit with a major unexpected expense and wind up right back where you started.

So while you’ll need to continue making at least monthly minimum payments on indebted accounts, you should initially devote more of your budget to building a financial safety net.  The easiest way to do so is to set-up automatic monthly transfers into a savings account.

Pay Off Debt:  Once you have about three-month’s take-home squirrelled away, you can begin the assault on your debt using a tactic known as the Snowball Method.  Under this approach, you continue making minimum payments on all of your balances, except the one with the highest interest rate.  You’ll devote the majority of your budget to that costly balance until it’s paid off, and then repeat.  When you’re completely debt-free, you can attribute the entirety of your debt/savings budget to savings, focusing on a college fund for your kids as well as your retirement fund.

Build Excellent Credit. Good credit saves you money.  In fact, it can save you well over $1,000 on your credit card, auto loan and mortgage every single year.  And if you have excellent credit, your credit standing can actually help you save money while paying down any debt that you might have. 

Credit card companies are offering extremely attractive financing deals these days.  For instance, the Slate Card from Chase offers 0% on transferred debt for 15 months and doesn’t charge either an annual fee or the 3% transfer fee charged by the average balance transfer credit card.

Using a credit card while maintaining low credit utilization and always making on-time bill payments is one of the most efficient ways to build credit.  Credit cards relay information to the major credit bureaus every month, and as long as it’s positive, this will either build out a thin file or devalue past mistakes.  Credit improvement doesn’t have to cost you a thing either, as you can find a credit card with no annual fee and simply allow your card to be reported as being in good standing every month without actually making any purchases.

Making a specific plan for how you are going to tackle your debt throughout the course of daily life is key to making the goal a reality. Telling a close friend or family member about your goal and even inviting them to participate are great ways to promote stick-to-itiveness.  So find a wallet workmate and enjoy the savings!

Odysseas Papadimitriou is CEO of the personal finance websites CardHub, which helps people find the right credit cards and gift cards for their needs, and WalletHub – the first social network built from the ground up around personal finance.