Necessities first: These are the things that you absolutely need to live. Food is priority #1 because you need to nourish and nurture your family—but that doesn't mean eating meals out frequently and it means more tuna casseroles instead of pork chops and sirloin steaks. You need your house, so it's important to pay the mortgage or rent. You need it to be warm in the winter and lit year-round, so it's key to pay the utility company. You need a phone, so Ma Bell gets paid. You need transportation to work, so you make the car payment. If you owe child support, it's a must to pay not only because that's part of being a good parent, but because not paying can get you thrown in jail. And finally, because getting in to see the doctor these days—particularly if you have no health insurance—requires paying the bill then and there, you take care of medical emergencies.

Uncle Sam second: If you have the money to pay your taxes immediately, the IRS will generally work with you to come up with a schedule of payments. By all means, though, file your taxes when they are due. Not filing can result in penalties and interest of up to 25 percent of what you owe.

Most student loans are backed by the government. That means that, like back taxes, the government is allowed to come after these loans in a way that other creditors aren't. If you're delinquent in paying your back taxes or student loans, the government can seize your tax refunds and garnish your wages and, in some cases, your Social Security benefits. Fortunately, the government also has a number of solutions for people who can't afford to make their student loan payments, including putting those loans on hold if you're out of work or stretching out (and thereby reducing) the amount owed monthly. However, the longer you take to pay off the loans the more interest will accrue, so tighten your belt and pay as much as possible.

Everything else third: All of your other debts—bank-card debt, department store debts, payments for furniture and appliances—are back-burner debts. That doesn't mean you shouldn't pay them. You borrowed the money; of course, you should try to pay them. But if you're in a situation where you know that not every creditor is going to get paid, these are the ones you put on hold.

Step 2: Track your spending and find extra money to pay down debt

Get all of Oprah's Debt Diet steps