• Rework your budget – Your budget will, no doubt, look dramatically different when unemployed that it did while you were employed. Once you have ascertained your monthly unemployment compensation and severance package, it is time to rework your budget and account for the loss of income. You may need to cancel your weekly dinner out or cancel your cable to make ends meet, but it is important to make a realistic budget while unemployed so you don’t end up in financial peril while you look for a new job.
• Consider minimum payments – Although most financial planners will tell you to always pay more than the minimum payment on your credit cards, now is not the time to do so. Send in the minimum payment each month until you secure a new job. Although paying just the minimum payment won’t do anything for your balances, it will keep your credit score intact, which is the most important thing to worry about when unemployed.
• Call your creditors – If your budget while unemployed does not permit you to make the full payments on your debts, it is crucial that you contact your creditors before missing any payments. Most creditors are more than willing to work with you to find a resolution, so don’t ignore your financial problems during this time. It is important to note, however, that once you make a new financial payment plan with your creditor you must keep up with your end of the bargain; otherwise, the creditor will not be so kind to work with you in the future. In other words, don’t agree to a payment plan that you cannot realistically afford.

For many of us, a major challenge each month is staying within our budget. Often times, a few bucks in our wallet disappear in the blink of any eye. From our morning latte to stopping off to buy a gallon of milk and a loaf of bread, our budget is blown in a heartbeat.

If you want to get a handle on your budget, the first thing you need to do is consider where your money is going. In order to accomplish this, you may keep a notebook in your purse or wallet and mark down every expense (which is annoying and time consuming to do), or you can simply start swapping out your cash purchases in lieu of your credit card.

A credit card does something cash cannot: it tracks every penny you spend and then sends you an itemized list of those expenses each and every month, in the form of a credit card statement. So, why not consider using your credit card to track your household’s monthly spending?

Here’s what to do:

• Get a credit card with a great rewards program. After all, why not add a little incentive to your spending each month by racking up rewards points in the process?
• Swap out all cash, check and debit card purchases with your credit card.
• Don’t consider this project to be a “free for all” in terms of spending, as this will not accomplish much of anything. Instead, shop as you normally would; simply pay by credit card instead.
• When your credit card bill arrives, pay it off in full, otherwise your rewards won’t mean much.
• Sit down, as a family, and review your last month’s spending. Separate the purchases into categories and consider areas in which you can cut back. Have you exceeded your monthly grocery budget? Have your clothing purchases caught up with you? Do you really need to go out to eat that many times each month? Use this statement as your wake-up call to make changes so you can, once again, gain control of your family budget.

The truth is that spending on a credit card is a very easy action that is often done with little forethought. And that could mean a recipe for disaster. If you want to keep your credit card spending under control, here are some tried-and-true words of advice:

• Never spend beyond your means – Many people have heard this, but few people really abide by it. Turn your spending into things you truly want and can afford, not things you want but really cannot afford. As a general rule, if you cannot afford to pay off your purchase in a month or two, you probably shouldn’t purchase it. And the best case scenario is to charge only what you can afford to pay in full the following month.
• Think twice before using a retail credit card – Retail credit cards are so enticing. From their special coupons and deals to their “member only” perks, it is very easy to fall into the trap of a retail credit card. However, this enticing card may also come with a hefty interest rate and even heftier fees. Plus, many studies have shown that people spend much more in a store when they have a store credit card in their back pocket.
• Cut down on your credit cards – The truth is that most people need only two credit cards: one for everyday spending and another one for emergency use. Don’t go overboard and shove numerous credit cards in your wallet; it will only encourage overspending.
• Stop and think before you charge – Often times, simply by stepping back and taking a moment to stop and think about the purchase you are about to make on your credit card, you may spend less. Credit card spending, because it requires no upfront cash, is a habit that can quickly spin out of control if you don’t really take the time to reevaluate the importance of your purchases.

After all, although many of us have decidedly more complex financial pictures than we did when we were younger, the concepts remain the same.

Here are a few lifelong money lessons we can all stand to remember:

• Understand your lifestyle and what it can support – One of the first mistakes many of us make is living well beyond our means. Understanding what kind of life we can afford to live is important because it requires us to be really honest with ourselves. Although it may initially make you feel more important to own a shiny, new car, struggling to manage the monthly payment will quickly overshadow any feelings of pride.
• Put saving money on the top of your priority list – Saving money each month –regardless of how little it is – is vital if you expect to live a financially secure life. Although most people will agree that this is important, the truth of the matter is that most of us put saving onto the bottom of our priority list. The result: we end up saving very little – if any – at all.
• Understand the responsibility that comes along with credit cards – if you don’t fully appreciate that credit cards can be your best friend or your worst enemy then you’re doomed for failure when it comes to the credit card game. If you make a commitment to spend wisely on your credit cards and pay off the bills each month, you can be sure you will use credit cards, but credit cards won’t use you.
• If you don’t know something, ask questions. Many of us, perhaps out of embarrassment or pride, fail to ask important financial questions and, as a result, find ourselves in deep trouble. Take credit cards, for example: if you fail to fully understand a card’s terms and conditions, you could end up with a card that causes you big problems. Your best bet is to carefully read the card’s terms and conditions and contact the credit card company for an explanation if you don’t understand something.

The truth of the matter is that many of us are in significant credit card debt because of our penchant for material goods. If you are an overspender (and trust me, you know if you are), you must make better decisions when it comes to your spending, otherwise you can be assured your future will include the burden of credit card debt.

If it seems as though the mall is calling your name, you need some sensible solutions to curb your need to spend. Here are a few sensible solutions for curbing your overspending and getting your credit card debt and your finances under control:

• Understand who you are – You may be an overspender if: you have maxed out credit cards with little to show for it; you purchase things you never use or wear; or you frequently hide your purchases from your significant other. It’s time to face the music, so to speak, and realize your spending has become more than a relaxing pastime.
• Understand your motives – Why do you shop? Do you shop to distance yourself from the stressors of life? Do you shop because you experience a brief high after making a purchase? Or do you shop because you are consumed with accumulating material goods? You can’t begin to change your way of thinking or your actions unless you really begin to understand why you overspend.
• Take immediate action – The best route to take when overspending is to eliminate the triggers and the cards themselves. Remove the credit cards from your wallet, cut them up if you have to, and identify the circumstances that may trigger an impulse to overspend.
• Maintain a journal – Your journal may include everything from your emotions and feelings to your spending habits. Writing everything down so you can look back on it and reflect is one of the best ways to begin changing your actions.
• Stay away from temptation – This may seem quite obvious, but it’s worth mentioning: stay away from locations and settings where you have a tendency to overspend.
• Develop strategies – One of the best ways to extinguish bad behavior, such as overspending, is to replace it with a healthy alternative. Instead of shopping, call a friend and catch up over coffee; begin reading those books you have stacked in the corner; or volunteer at your favorite charity each weekend.

If so, then maybe it’s time to go back to basics with your finances. Here’s how:

• Make a budget – Not many of us think to create a budget, but this simple act can make a huge difference in how you spend and save your income. Just by making a budget you can better understand where you’re spending your money and why you are unable to make ends meet.
• Make changes in your spending – After you’ve made a realistic budget, you can begin going back to basics by making cuts to your spending. That latte every morning at your local coffee shop could be costing you big and cutting it out could allow you to put an extra $100 on your credit card each month. Remember: small changes can (and do!) make a big difference in your household budget.
• Order a copy of your credit report – One of the best ways to clear up your finances and your credit is to order a copy of your credit report from all three credit reporting agencies. Knowledge is your best friend when it comes to your finances, so correct any errors or discrepancies on your credit report and find ways to improve your credit score.
• Consolidate your credit cards – A great way to scale back when it comes to your finances is to move all debts onto one credit card with a competitive interest rate and an attractive promotional balance transfer offer. But don’t undo all the good you did by transferring balances; put those other credit cards away and make a commitment to stop spending on them while you pay off your balance transfer.
• Find one, great credit card and stick with it – Instead of using retail credit cards with high interest rates and carrying around multiple credit cards, which are often hard to keep track of when it comes time to pay bills, shop around for a good credit card with features that best fit your lifestyle and spending habits.

The following list of clues will help you identify if it’s time to re-evaluate your finances:

1. You immediately begin to feel stressed when you head to the mailbox – If you get heart palpitations every time you walk toward the mailbox, it may be time to re-evaluate your finances. If you delay opening your mail, or if you fail to even open your credit card statement because you can’t bear to look at the balance, it is definitely time to re-evaluate your finances. Putting your head in the sand, so to speak, accomplishes nothing when it comes to handling your finances; and in many cases, it simply makes matters worse. It’s time to face your financial demons head-on so you can begin heading down a better financial past.
2. You are having difficulty paying more than the minimum payment on your credit cards – Credit cards are a great financial tool if used correctly; if used incorrectly, they can wreak havoc in your life. If you are struggling to pay more than the minimum payment on your credit card, it’s time to either re-evaluate your spending, your budget, or both as to avoid a vicious cycle of hefty finance charges and low, monthly payments.
3. You find yourself using credit cards to handle monthly bills due to a lack of cash – A sure sign of a financial problem starts when you begin paying your monthly bills with your credit card because you have mismanaged your cash flow. Credit card use should be a convenience, not a necessity.
4. Your credit card is near its limit – If your credit card is nearing its credit limit, your spending may be out of control. Pay close attention to your credit card activity over the past six months so you can determine where you went wrong in terms of spending.

Upon receiving a credit card rejection, you will definitely want to investigate and remedy the problem so you can, once again, enjoy access to credit.

Here are the following steps you will want to take following a credit card rejection:

1. Order a copy of your credit report from all three credit reporting agencies – If you are denied credit based upon your credit score, you are entitled to receive a free copy of your credit report. Take advantage of this offer and order a copy of your credit report so you can begin to understand where the problem lies.
2. Fix the problems on your credit report – If you find information that is either inaccurate or incorrect, you will want to immediately dispute the credit report’s information. To do this you will need to provide the credit reporting agency with a written request to dispute the information, along with any supporting documentation. Once the dispute has been submitted, the credit reporting agency will investigate the situation and provide you with an answer, usually within 30 days.
3. Fix the problems in your budget – If you have made more poor financial decisions that have led to your credit card rejection, the first thing you will need to do is make a household budget so you can have a better idea of how your income is being divvied up among your financial obligations each month. You can’t fix your credit problems unless your first understand how to manage your monthly income and expenses.
4. Fix the problems with your spending – If your spending is the problem, now is the time to make decisions that will either positively or negatively reflect your credit from here on out. Order copies of your credit card statements from the last 12 months and carefully review them so you can get an idea how and why you were overspending. In order to remedy your credit problems, you must face the music by taking the time to really understand the mistakes of the past.

Here’s what you need to do now to begin digging yourself out from underneath your debt:

• Strategize and develop a plan – Without a plan you can’t expect to begin undoing the damage. In short, you must sit down with your partner and make a budget. If you can recognize where your money is going each month, then you can begin making changes now. Your first order of business should be to collect at least three months of bills, credit card statements and bank statements. Then, take the time to review this paperwork so you can examine spending trends.
• Start cutting back – It may seem quite obvious, but now is the time to see if your bills are bigger than your income. If this is the case, you will need to determine which of these bills are essential and non-essential, and begin eliminating the non-essential bills. If your income still covers your bills, but you are still finding it difficult to pay bills each month, then your spending is the problem. In this instance, you will want to begin keeping a detailed journal of your spending so you can find ways to cut back on your monthly expenses.
• Find the money and put it to good use – Once you have a good idea of your monthly income versus your monthly bills and spending, you will be able to either recognize areas in which you can cut back to better begin paying down your debt. A few extra dollars may not seem like a big deal but, in the long run, it can make a serious dent in your debt. Take all extra money each month and put it towards your highest interest rate debt and work your way down.

How can you formulate a credit card plan? The easiest way is to determine your overall financial goals – both in the short term and in the long term. How do you want to manage your money? How much money can you comfortably afford to spend on credit cards each month? Will you always commit to paying off your credit card in full each month or have you developed a game plan for paying off existing credit card debt?

In other words, everyone’s credit card plan will look slightly different, but all will have the same goal: to use credit responsibly and to keep our credit card debt to a minimum.

Here are some factors you may want to consider when formulating your credit card plan:

• Pay as you spend – A great way to keep your head above water when it comes to finances is to commit to paying off your credit card bill, in full, each month as to not accumulate any debt. You may also commit to not spending on your credit card until the bill has been paid in full.
• Never exceed the 30 percent mark – The magic number, it seems, for credit reporting agencies when determining your credit score, is 30 percent. In particular, credit reporting agencies want to see your overall debt account for less than 30 percent of your income; and that includes your credit card debt. Take the time to review your debt picture and determine whether you have exceeded that 30 percent mark, and then make a commitment to either lowering your debt or keeping your debt under this magic number.
• Develop a payoff goal – and stick to it – Many consumers’ credit card plan is undoubtedly paying off their existing credit card debt. Although how you will pay your debt off will vary, the overall goal should be the same. Therefore, once you have determined the time frame during which you want to pay off your debt, and the payment that you can afford each month, stick to it. In other words, make a commitment to follow through with your payoff goals.