In these turbulent economic times, many people are finding themselves dealing with the stark reality of being in over their heads financially. With unemployment on the rise, many are finding themselves not only drowning in debt, but unable to pay for everyday expenses - let alone credit card minimums.

However, there are things you can do to weather this storm, stop struggling with debt and start living financially smart.

Step 1: Create a Budget

The first step in any good financial plan should be a total assessment of your current financial situation. This means you need to know exactly how much money is coming in versus how much money you are spending.

Begin by totaling all monthly income from all sources. Then, create a list of Fixed Expenses. Fixed expenses are expenses that remain the same month to month - such as mortgage, rent, etc. Now, create a detailed list of Variable Expenses. Variable expenses can be things like dining out, clothing, entertainment, etc. Lastly, create a list of Debt Payments that include any minimum payments you have to make towards your debt.

Take your total monthly earnings and subtract the Fixed Expenses, Variable Expenses, and Debt Payments. If your budget comes out positive - great! You can take this extra money and funnel it towards additional debt payment or a savings account. If your budget comes out negative, you will need to adjust your Variable Expenses until you find a budget that works for you.

Step 2: Learn to Live Frugally

Living frugally has lately become less a matter of taste and more a matter of necessity. Budgets are great for identifying where you're overspending because budgets show you exactly where your money is going. This allows you to spot places where you are living above your means and you can use this knowledge to cut back in these areas.

Living frugally does not mean you have to deprive yourself of everything you've come to know and love. On the contrary, its about spending smarter so that you can enjoy the things you love without putting yourself in financial hot water. Frugal living is about shopping around for the best deal, coupon clipping, doing things yourself (such as an oil change, etc) so that you can enjoy the occasional night out on the town guilt free.

There are many online resources for tips on how to live more frugally - and these are only a free online search away.

Step 3: Debt Management

If you've budgeted and coupon clipped and still find yourself navigating through uncertain financial waters, consider enlisting the services of a reputable debt management company. With services such as bill consolidation and debt settlement, these companies can negotiate with your creditors on your behalf and reduce your monthly payments so they are more manageable.

You won't have to deal with the hassle of calling each and every credit card company yourself, and you can stave off collectors by having the debt management company deal with them directly. The earlier you contact a debt management company, the more options you'll have for negotiating down your debt.