If you are feeling the weight of overspending, it’s time for a debt overhaul. Follow these three simple strategies, and your financial engine will be purring like a kitten:

1.    Conduct an expenses vs. income analysis.

Gather up all of your bills and receipts. Categorize what you spend in each area: Rent/Mortgage, car payments, insurance, credit cards, electricity, cable, Internet, eating out, groceries, gas, lattes, etc. Total it all up.

Next, work out what your monthly take-home pay is. Be sure to include any extra income, no matter how small. Just as you did with your expenses, total it all up.

How does it look? Is there more going out than there is coming in? Are you breaking even? Maybe your income is just barely higher than your debt. If it’s the latter, congratulations!

2.    Okay, now that you know where things sit, it’s time for the next step.

This part can actually be fun if you turn it into a game of, “Let’s see how little we can spend each week!” Go over your expenses. Take an honest look at any expense you can cut. For instance, make coffee at home, and take it to work in a travel mug, instead of buying a latte. That saves you up to $60 a month right there!

3.    Now comes the third and final task: The debt snowball.

Look over all of your credit card bills. There is some debate over whether to begin paying the one with the highest interest rate first or the one with the lowest balance. You can use the Snowball Calculator to figure out which method makes the most sense to you.

For ease of description, we’ll use the lowest balance method here.

Let’s say you have three credit cards: “A,” “B,” and “C.” “A” has a balance of $800 with a minimum payment of $45; “B” has a balance of $1800 with a minimum payment of $80; and “C” has a balance of $3200 with a minimum payment of $130.

Let’s say you’ve also figured out how to squeeze an extra $250 out of your monthly expenses. So, you can now pay $295 per month to credit card “A” while making the minimum payments to “B” and “C.” That means credit card “A” will be paid off in three months!

Jump up and down, cut the card, and consider closing the account (just beware that if you close numerous credit card accounts in a short period of time, you will decrease your available credit, increase the amount of credit you’re utilizing and therefore, decrease your credit score!) Then, immediately take that $295 per month you were paying toward “A” and tack it on to the $80 you pay “B.” You can do the math. In just eight short months from now, you will have wiped out two credit cards! Use the same method for “C,” and you are debt free before you know it.

There are many strategies to paying off debt. The important thing is finding a plan that works for you and sticking to it.

Pay Off Your Debts in 2009: 3 Strategies To Being Debt-Free was created by and is property of American Consumer News.