Many people have run into credit problems by taking on too much credit card debt. Usually this is not something that happens overnight. Rather it is a long process resulting from purchasing small things with your credit cards and only making minimum payments until your credit card balance becomes too much to handle.

This can leave many people feeling overwhelmed and unsure of what to do. If you have a good job you should be able to pay off your credit cards, but if you are like millions of Americans facing tough economic times it may be difficult just to put food on the table. Sound familiar?

Almost everyone has a bad month every once in a while, where it is not possible to pay all their bills. It always seems that something goes wrong at the worst possible time. Perhaps you lost your job or and some type of emergency and used your savings to pay over due bills. Difficult financial times can cause enourmous tress that can ruin lives and families.

In order to avoid bankruptcy or a cycle of your credit card debt spiraling out of control, you need to help yourself first. The first step is to identify what went wrong.

In order to identify what went wrong you would need to have a close look at your budget and spending habits. It is easy to say the bills are slightly behind because some event happened that you could not miss but that isn't the root cause of the problem.

Typically the root cause of money problems is a lack of planning, personal spending weaknesses and a lack of understanding as to what your money is doing for you. Money is a powerful force that must be harnessed to be a useful tool. If you can not harness the power of money you will forever expend all your energies cashing it rather than enjoying it.

So how do we harness the power of money? The first step is to plan your attack by creating a detailed budget. This will take some work but will be more than worth it. Consider the benefits of having a detailed three-month budget.

With a detailed three-month budget you will be able to account for how much you get paid, when bills are due and how much is owed and create a benchmark for determining how well you are doing sticking to your budget. If you use this tool wisely you will know that you have a large bill to pay in four weeks and will be able to budget a small savings program to reduce the amount that must be used in the pay period that the large bill is due. Having to pay less on the pay period of the large bill may mean you are now able to afford a reasonable amount of food.

The next step is to identify your weaknesses. This can be one of the hardest things to do. Many people become used to going out for lunch every couple of days, or out for an evening once a week or perhaps going clothes shopping frequently. These things by themselves are not bad but they may be compounding your financial troubles. Consider buying a cheap lunch once every three days. This may mean spending $5 a day 10 days a month for a total of $50. Would this pay a monthly utility?

The point is not to deny yourself everything but to limit things to a reasonable amount. Perhaps you could reduce purchasing lunches to once a week. This would be a total of $20 a month, $30 less than before. This may not seem like enough of a savings to make a difference until you apply the same logic to other areas of your life such as going out to the theatres. Now the savings may be $60 a month and that could mean the difference between paying a bill in full and hurting your credit rating by falling behind on your bills.

The final area to think about is what is your money doing for you? There are many small things that can be done to help you make your life better. For example, if you are saving $200 this check to put towards a $400 bill on your next pay period, why not put your money into a high interest account that is compounded daily. You may only see $0.15 interest this month but, as you can imagine, if you continue this process you are not only ensuring you are sticking to your budget but you are making a few extra dollars a year for doing so. Every little bit helps.

If you are truly in a situation where your finances are out of control then perhaps you should consider a debt consolidation loan. When you get a debt consolidation loan the lender pays off all of you r current loans and you enter into a repayment schedule with just one lender. This can be a great benefit to you as the amount being repaid monthly will be less than if you where repaying several loans individually and of course being able to meet your credit obligations fully and on time will help your credit rating.

Keep in mind the old saying, look out for the pennies and the dollars will take care of themselves. Most likely it was a bunch of small debts that seemed like pennies that got you into trouble. Further, if you are able to save a few pennies on a regular basis you will find that you have a few dollars to help out if an emergency is to arise.