Holiday debt hangover: dreading those nasty credit card bills? Here's how to get your finances back on track after the holidays.

It's Jan. 1 and your head's pounding, your hands are shaking, and you've got a bad case of the chills. No, you don't have the flu. What you've got is the holiday debt blues. Two solid months of office parties, gift shopping, and entertaining have taken a heavy toll on your cash flow and your credit cards. And all you have to show for it is a stack of bills, a depleted bank account, and the fear that you're not going to see financial solvency anytime soon.

Latonia Pulley, 39, has been down that road. For years, she and her girlfriends shopped until they dropped. "We worked extra jobs so we'd have more money to spend on Christmas," says the speech instructor at Baltimore County Community College, who used to spend between $2,000 and $3,000 each Christmas. "The whole theme of the holiday was about who was going to buy the most." At the height of her debting days, Pulley, who was making $8.50 an hour, had almost $15,000 in credit card debt, carrying a 22% interest rate.

Pulley is far from alone. The National Retail Federation predicts that shoppers will have spent $219.9 billion on Christmas 2004, a 4.5% increase from last year. This year's hot items included home-related merchandise and designer clothing. According to the NRF, the holiday season accounts for nearly one-quarter, or 22.83%, of annual retail sales. Now that you know you're in good company, what's next?

The first step is to face the music, according to Judy Lawrence, a budget coach and the author of The Budget Kit: The Common Cents Money Management Workbook (Dearborn Trade Publishing; $18.95). "As the post-holiday credit card bills come rolling in, assess when the totals are due, how many credit cards you have, the percentage rates for each card, as well as the minimum due," she says. Before you begin hyperventilating, remember that this information is not a reason to beat yourself up.

If most of your debt is credit card related, take action now. Late payments can turn into bad credit, which can prevent you from owning a home or even getting a job. "Call and negotiate for a lower rate, a reduced interest rate, or a promotional package," says Lawrence. "If your credit card company balks, tell them you plan to move to another card." Cheryl D. Broussard, a registered financial adviser and author of The Black Woman's Guide to Financial Independence: Smart Ways to Take Charge of Your Money, Build Wealth, and Achieve Financial Security (Penguin Books; $15.95), says you may be able to convince the credit card company to drop interest charges for a few months. Although many people are tempted to roll over their debt to a zero percentage card, Lawrence warns consumers to proceed with caution. Having a zero balance on your old card may tempt you to charge new items. You don't want to go there.

Pay off your lowest credit card balance first. "It's not really true that you'll never get out of debt if you pay just the minimum," says Mary Hunt, author of Debt-Proof Your Marriage: How to Achieve Financial Harmony (Revell; $19.99) and the creator of Cheapskate Monthly, a newsletter and Website (www.cheapskatemonthly.com). "As long as you're not adding to your current debt load, you'll be able to pay [it] off." Hunt's Website offers the Rapid-Debt Repayment Plan Calculator, which calculates how long it will take you to pay off your debts. Here's how the plan works. Say you have four debts. Add up the minimum payment due on each account and commit to paying at least the minimum on each debt per month. "Line up your debts according to size, putting the one with the shortest pay-off time at the top and the one with the longest term at the bottom," says Hunt. As one debt is paid off, take the money you were paying toward the paid-off debt, and apply it to the regular payment of the next debt and then use the same process with the debt after that until the entire debt is paid in full.

OK, you've contacted your creditors and have hopefully negotiated a little leeway. Now it's time to figure out how you're going to pay down your debt. Write down your monthly income and your monthly expenses and then factor in your debt. You have to figure out how the credit card debt fits into your overall budget. It doesn't? Well, read on.

If money's really tight, consider taking a part-time job until the debt is paid down, says Brooke M. Stephens, author of Wealth Happens One Day at a Time: 365 Days to a Brighter Financial Future (HarperBusiness; $14). And "see if you have money in savings and apply some of that money toward your debts," says Diane Mull, the regional director of community outreach for Consumer Credit Counseling Service of Southern New England. But Mull warns that consumers should never deplete their emergency reserves.

"Give up one habit, such as a manicure or pedicure, and consider canceling your cable TV for a few months and use the extra money to repair holiday debt," says Hunt. Juliette Fairley, co-host of the Discovery Channel's money makeover show, Cha-Ching! Money Makers, suggests using a phone card instead of paying for long distance. "I don't have long distance on my phone," she says. "I cancelled it after I realized I was paying $150 a month. Now I use a phone card for long distance calls."

Create a spending plan. Write down your salary, your expenses for the month, and your debts. "Be realistic about budgeting so you don't get discouraged," says Lawrence. "Keep track of your expenses for the first three months," she says. "After three months you'll be able to see where you need to cut back."

Don't panic if you still don't have the money to pay off your debts. Contact an agency affiliated with the National Foundation for Credit Counseling, says Mull. "They will put together a budget for you and will forecast how long it will take to pay off your debt," she says. A reputable nonprofit will charge you a small counseling fee, usually less than $50.

The NFCC, the nation's largest national nonprofit credit counseling network, has more than 1,000 community-based agencies. To contact NFCC, call 1-800-388-2227 or log on to www.nfcc.org. If you plan to find a credible agency on your own, remember to ask the agency if it's a nonprofit, if it's licensed in your state, and if it's listed with the Better Business Bureau. Also, ask the agency representative about up-front costs--if they're more than $50, a red flag should go up. And, ask them if they keep your first month's debt payment and use it toward "fees." If they say yes, you'll know that the organization may not be legit. Broussard also cautions consumers to be wary of debt settlement companies. "This goes on your credit report as a charge-off," she says, which can negatively affect your credit.

You can also work directly with your creditors. Pulley wrote letters outlining what she could pay, paid her bills on time, and used any extra money she received to pay off her debt. And she was able to do it by working only one job. It took her five years, but today she is free of the debt she created in her 20s and was recently preapproved for a $200,000 mortgage based on her salary and mid-600s credit score.

You may also want to do some personal therapy to figure out why you got into debt, says Stephens. "We don't have a history of wealth building," says Fairley. "Our participation in the economic arena only dates back to the third or fourth generation in many families. We're just learning that debt is a hole. While it's not our fault, it is our problem."

Support groups like Debtors Anonymous (www.debtorsanonymous.org) will supply you with the tools you need to stop creating debt. And Websites like cheapskatemonthly.com, Lawrence's moneytracker.com (www.moneytracker.com), Stephens' Website (www.brookestephens.com) and blackenterprise.com provide users with a sense of community and offer invaluable information.

Unless you begin planning for Christmas 2005 now, you may end up in the same situation next year. Lawrence advises creating a plan for 2005 and budgeting for unexpected holiday expenses, such as shipping, wrapping paper, trees, decorations, holiday entertaining, and travel.

Marry and Dana Capers of Bedford Heights, Ohio, start thinking about Christmas shopping in November. They budget about $1,100 for the holiday and pay for gifts with cash or their American Express card, which they pay off the following month. "I do a spreadsheet of all the people I have to buy for and I assign a dollar amount," says Dana, 36. They begin setting money aside in October and do so by paying the minimum on credit cards for Octo ber, November, and December and by foregoing restaurant meals and entertainment. If they find they're reaching their budget limit, they will nix holiday get-togethers or deduct the money from their January budget.

Open a Christmas Club account. "To get an idea of how much you'll need to save, look at how much you spent this Christmas and divide the amount by 52," suggests Hunt. "That's how much you'll need to put aside every week." If you really went way over budget and plan to scale down your gift giving next season, Broussard adds that if you save $3.33 a day--less than the cost of a latte--you'll have $1200 in cold cash by next Christmas.

Leave the plastic at home, says Fairley, author of Cash in the City: Affording Manolos, Martinis and Manicures on a Working Girl's Salary (John Wiley & Sons Inc.; $14.95). "Consider cutting up your credit cards and operating on a cash basis," she says. "To me, credit cards are like crack cocaine." If doing without your charge card is unthinkable, you may want to take Stephens' advice. "Consider reducing your line of credit--you'll spend what they'll allow."

Shop in the off-season. "If your state has a tax-free shopping day, take advantage of it and do your holiday shopping then," says Lawrence. You can also snap up bargains at back-to-school and end-of-season sales. Fairley looks for small gifts, ranging in price from $5 to $10, throughout the year. You'll also find bargains on the Internet, says Hunt. And next year, once you're solvent, you can take advantage of after-Christmas sales!

Remember the reason for the season. "Christmas is a time of remembrance," says Pulley. "We celebrate the holiday by spending it with our family and treating it as an extension of Thanksgiving," says the mother of three. Instead of lavishing their friends and family with expensive gifts, the Capers have an annual holiday dessert party--and yes; they do include the expenses on their holiday spreadsheet.

"Give practical gifts or offer to do things for each other," suggests Stephens. "A friend of mine helps me with office work and computer stuff and I give her 10 babysitting coupons."

Don't forget to consult your other half about how you plan to celebrate the holiday--and about how you plan to avoid going into debt throughout the year. While Dana, who is a bank vice president, has always been careful with her money, it took Marty a few years to get with the program. "When I was single I spent a lot on Christmas--$1,000 was nothing for me," says Marty, 40, who is a respiratory sales representative for a pharmaceutical sales company.

Today the couple shops for the holidays together, but it took a while for them to get on the same financial page. "It was tough for me to cut back, but my priorities changed when we got married and began building a house, paying off debt, and planning for the birth of our daughter, Tara, who is 21 months old," says Marry. He came into the marriage with almost $5,000 in credit card debt with 18% interest, which he promptly paid off by using money from annual bonuses. He also got rid of his car, which means the couple only has one car note. "Because I have a company car, I decided to pay off my car, which had a three-year loan, by borrowing against my 401(k)," says Marty. "I ended up saving almost $400 per month, which we used toward debt." Marry then paid off the 401(k) loan within a year. By putting their heads together and making the commitment to pay down debt and live within their means, the couple was able to purchase a larger house when they applied for a home loan.

Remember to save. "Many people feel it's wrong to save while you're in debt," says Hunt. "But saving helps to eliminate that 'poor me' attitude that credit card companies want to 'fix' for us." And it also reminds us that we're responsible for our future. "We're not going to wake up one day and be debt-free--there is no fairy godmother," says Stephens. "When you realize that you're spending $600 a month on debt and that money could be going toward investing in a comfortable future, your priorities will change." And that holiday debt hangover will be a thing of the past.