The national debt increased more than 1.6 billion – excuse me, trillion dollars in 2010, rising to a record $14 trillion according to the U.S. Department of Treasury.

 Additionally, personal bankruptcies rose by nine percent to 1.53 million.

 These two statistics alone, not to mention the countless others that make us wish we had a time machine to go back to the 1990s, are enough to make the hairs on anyone’s neck stand on end.

 But there is hope. It’s a new year, and that means an opportunity to avoid debt and be smart with your money for the next 12 months. With the help of David Rector, manager of the Manassas Park branch of Alliance Bank, here are some tips on how to make it happen:

 1. Know where your money is going

This is the single most important thing you can do to avoid debt, Rector said.

 “Think about it. If you go to Starbucks every morning for a cup of coffee, it may not seem like the three or four bucks you spend at the time is a huge deal. But over a span of six months, that’s four or five hundred dollars that you don’t even realize you’ve spent,” Rector said.

 You don’t have to cut out your morning coffee or other smaller purchases like it. Simply be sure to keep in mind that they can pile up over time.

 2. Prioritize

 Like many Americans, you may find yourself in some debt already. Often times that debt comes from possessing too many credit cards. If that is true for you, it’s important to prioritize the order in which you pay them off.

 “It’s important to pay off your credit cards in the order of highest interest rate to lowest," Rector said.  "That way the high interest won’t accumulate too much.”

 3. If possible, avoid the plastic

 Of course it’s practical to have a credit card or two. But if you get behind on payments, the advantages essentially disappear. A low credit score means  it is less likely to get important loans, and accumulate what loan experts like Rector call “good debt,” things like student loans, car loans and mortgages. But otherwise, try not to be too heavy-handed with your credit card.

 “If you’re going to the drug store to buy a few things, or getting ice cream for the kids, try to pay with cash if you can. Just like the Starbucks example, these things can add up,”  Rector said.

 4. Use less energy

 Follow this step and you’ll be killing two birds with one stone. You’ll be helping the environment and cutting down on costs at the same time. And using less energy doesn’t mean making drastic, life-changing modifications to your home. Small changes like closing doors to unused rooms or turning off the air conditioner during the day can make a serious dent in utility bills.

 “Here’s another example of making sure you know where your money is going,” Rector said. “Televisions use energy even when they are not on, and computers use energy even when they’re shut. So at night, unplugging your TV and turning off your computer will save you money.”

 5. Time your purchases

 With the holiday season already having come to a close, you may think this step is less pertinent. After all, department stores like Macy’s and Wal-Mart won’t have holiday sales year-round. But when it comes to the big purchases that you will be making this year, timing is everything.

 “Here’s a small example,” Rector said. “My wife and I needed a new Christmas tree. So guess what? We bought one on Jan 2, when we knew that nobody would be needing theirs and we could buy one for cheap.”

 Of course the principle of timing your purchases doesn’t apply only to Christmas trees. If you’re buying a car or a house, looking to rent an apartment, or looking to purchase that ipod you’ve been saving for, wait until the time is right. That means wait until you think have the necessary funds in the bank and wait until you think you’ve found what you’re looking for at the lowest price you think you can get.