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If you have been having problems making your monthly payments recently, you can blame it on the economy or you can take a long, hard look at the way you are managing your personal finances. If it is getting harder to meet your personal financial obligations, you should be looking at how you are spending your money. Tracking what you spend is the only logical way to gain perspective as to how you are using your money and what you need to do to manage your cash more effectively to avoid debt.

Start with analyzing your “big bills”. This includes your mortgage note, your car payment, and your credit card payments. Take a look at the total and then compare it to your gross pay each month. If your big bills total 40% or more of your gross income, it’s no wonder you are feeling the pinch. Even those that are well-to-do are finding it difficult to stay afloat in today’s economy. In fact, according to recent research, it seems that families that make more money are digging themselves deeper in debt than the rest of the nation.

For many, their current income could essentially be sufficient if they would just cut down on their spending. However, there are so many changes in financial industries that everyone must now take heed not only of what they are spending but also what they are making and what creditors are doing to change the rules.

Credit Card Fees

With so many changes in the credit industry in recent months, those who can not pay down their balances fast enough are going deeper into debt because of bigger fees and penalties, as well as lowered credit limits. If you tend to carry a balance that you can not pay off in one lump sum, you need to take measures to devote more cash to your credit card bills.

Mortgage Crisis

Throughout the last few months, there has been much trouble in the housing and mortgage industry. While things seem to be calming down a bit and mortgage rates are on the decline, many who may have qualified for a loan in previous years are now no longer able to qualify for a loan because of their debt to income ratios.  Underwriting standards have tighten too much to let people struggling in debt benefit from lower rates if they were interested in refinancing for cheaper payments if they already owned a home or for new home buyers looking for tax credits and possibly getting rid of high renting costs.

No Loan Assistance

Those in debt hoping for reprieve through consolidation loans, may not find much relief these days. Lenders are more stringent than ever when it comes to lending money. There is more emphasis on the application process and fewer people now qualify for a personal loan when struggling with debt. There are some lenders who would be happy to lend money but only with a outrageously high interest rates that people in debt should not even consider.

What to Do

More Income Needed

A second job may be in order to pay off debts fast and decrease your debt to income ratio. Unless you can wrangle more money from your current employer in the form of a higher salary or cash bonus, you may need to look elsewhere for supplemental income. If you are not in the position to add another few hours to your workweek, you might consider getting a new job entirely where your pay will help cover your monthly bills.

Debt Consolidation/Debt Settlement

Two popular debt solutions are springing up around the nation to help people solve their debt problems. If your debt is 40% or more of your gross income, you may want to check out what professional assistance could do to help you. No everyone will benefit from these solutions but each case can be analyzed on an individual basis to determine the best solution to get out of debt.

Stop Spending

Regardless of what avenue you choose to tackle your debt, you need to recognize that there is no time like the present to stop the debt cycle once and for all. By eliminating your bad spending habits now, you can learn how to manage the money your are saving more effectively and that learning experience will carry over when you are finally out of debt and on the road to debt recovery.

Tisha Tolar is a writer for DebtFreeDestiny.com, where she provides information about credit card consolidation, debt relief and how to get out of debt.