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Imagine what you could do in your life if you had financial freedom. Perhaps you would never work again. Or you would work, only it would be what interested you. Perhaps you would get that house, or car, or boat you dreamed of. And the best part would be that you wouldn't have to worry about how you were going to afford these things.

Financial freedom is a great thing, it really is. But to get there it takes work, and if you aren't prepared to put in that effort, then there's no point in reading on. But if you do read on, you'll learn that although it takes hard work to get financial freedom, the steps to it aren't that many.

Step One - "Know thyself".

That's it in a nutshell. What it means is, you've got to take some time out to think about what you want out of life. What are your hopes and dreams? You also need to think about who you are and what it means to be you. What are your strengths, what are your limitations? Where do you want to improve, to grow? What are you interested in, what matters to you? What are you not interested in? And, of course, what does 'financial freedom' mean to you? Take a notepad or a journal and write your answers to these questions. Just write, without hesitation. Keep writing. Then take a break, come back to it later and add some more thoughts. The more you understand yourself, the more solid your foundation for success.

Step Two - "Show me the money!"

To paraphrase Charles Dickens, if your annual income is $20,000 and you're spending 20,001, that's misery; but if your annual income is $20,000 and you're spending $19,999, that's happiness. So you need to know what you are spending and what you are earning. Not just in the big picture, but in the detail. You need to know what you are spending on clothes, treats, meals out and yes, on debt. Either keep a daily notebook, use a computer worksheet, or invest in a package like Quicken, and track your spending and your income in all the gory detail. You'll probably surprise yourself at the way money is leaking out in all different directions. But until you know what's happening, you'll stay powerless to do anything about it.

Step Three - "Eliminate the Negative"

Now you know where your debt is, how much you are spending on it, and where else the money is leaking away from you it's time to start taking control. Take two steps to do this. First, reduce your spending. Do whatever it takes: cut up your store cards (and most of your credit cards); set yourself a weekly cash budget (don't carry checks and cards around with you) and when you run out of your weekly allowance that's it, no more; identify those things you can cut out (magazine and club subscriptions; take-outs; whatever, be ruthless). Second, put all your debts, where possible, into one place. Consolidate those five or six card debts either with a low interest loan or with a low or zero interest balance transfer credit card. Sometimes a balance transfer card can be better than a loan, provided you have the discipline to pay it off in good time or you remember to keep switching to new balance transfer deals.

Step Four - "Accentuate the Positive"

So you've started to take control. The next thing to do is place that control on firm foundations with some good planning. First, set up a spending budget that covers all your outgoings (easy with a program like Quicken) and stick to it. Second, if you have any debts to pay off, set up an automatic payment to come out of your pay check the day it goes into your account - that way you won't miss it. Third, set up a savings plan. That's right, even though things are tough and you're still in debt, set up a savings plan. Find the highest interest account available and start paying in (again set up an automatic payment). It doesn't matter if it's a dollar a week or $100 a week, the key is to save something. You might think it's best to use any spare cash to pay off your debts, but the point of saving something is not - at this stage - to build wealth. The point is to pay off your debts and feel positive about it. Saving just a dollar a week is a positive thing you can do; it's a way of telling yourself that you aren't a slave to your debts, that you are actually in control of your finances and you can stay in control of them.

When you have paid off your debts, that's when you are in a position to move on to building up your wealth so that you can have financial freedom. We'll explore strategies around that in the Steps to Financial Freedom Part Two

Craig Brown is a life coach and web-preneur. For information on credit cards go to http://www.americancreditcardsguide.com