Like Plan9 and Martian have said, the credit line itself is not evil, and can be great if you pay it off completely every single month, and don't ever spend money you don't already have. Don't cancel the line either, a fairly significant part of your credit score comes from the average age of open account - closing your oldest (or only) account really hurts. I have an old credit card I never use (doesn't give me points) except to buy lunch or something once every few months just to keep the account open just for that reason.
You can create and track your budget pretty easily with a spreadsheet, but I highly recommend
Mint.com. It will automatically pull in the latest activity on each of your accounts, show you spending trends and warnings, cash vs debt, etc. Once you have a few months of history there it's pretty easy to predict how much your cashflow/expenses are and where you can save. It's free and very highly
rated by
third parties. Just make sure you keep on top of it.