Many Americans are overwhelmed with debt, some are barely keeping their heads above water, and others are just looking for practical solutions to weather the current economy.

From CNNMoney.com, here are some things you should know about money, debt, and how to manage your finances to help you live within your means.

The Truth About Debt

• We have too much credit card debt.
  U.S. households that have at least one credit card carry nearly $9,200 in credit card debt, according to CardWeb.com, and the average interest rate on that card runs in the mid to high teens. A survey by Experian indicates that one in seven Americans have more than 10 credit cards.
• Our savings are at an all-time low.
  In 2007, the Commerce Department reported that people are saving at the lowest rates since the Great Depression. The nation’s personal savings rate for 2006 was a negative 1 percent, the worst savings rate in 73 years. And a full 42 percent of Americans between the ages of 18 and 49 said that they are likely to spend more than make, according to a survey of 2,000 adults conducted by the Pew Research Center.
• There’s good and bad debt.
  Buying a home that’s most likely going to increase in value over time is considered good debt because it’s an appreciating asset. Borrowing money to pay for your college education can also be considered good debt, as long as you weigh the amount you’ll owe against your future earning potential.

  On the other hand, making impulse purchases like a new wardrobe or paying for your vacation by credit card is an easy way to fall even further into debt.

Steps You Can Take to Control Your Debt

1. Take charge of your spending.
   Many individuals who struggle with money have little idea how much they spend each month and what they spend it on. Track your expenses for one month, writing down every dime that goes out, whether you paid a bill or bought a soft drink. Cut back on items that you don’t need.
2. Prioritize your debts.
   List all your debts from the smallest to the largest amount you owe. Pay off your smallest debt first and keep going down the list until every debt is paid off, including your car and your home.
3. Get help if you need it.
   Maybe you’re at a point where you need a little assistance with your finances, or you’re so overwhelmed with your debt that have no idea what to do next. There are many options available to you that could offer help with managing your finances and getting out of debt, including credit counseling, debt settlement, and debt consolidation.
4. Be careful what and where you borrow.
   You could borrow against your home to pay off your debt, but be careful. Sure, you could eliminate, say, a car payment, but now your house is at risk if you can’t make the payments on your home equity loan. It makes more sense to make double car payments until that debt is retired instead of wrapping your car loan debt into your housing payment. With a 30 year mortgage, you’ll probably end up paying off your car several times over.
5. Set aside savings as soon as you can.
   In today’s economy, there’s no telling when you could be laid off. Set aside two to three months’ living expenses, just in case. If you remain gainfully employed, you could designate your savings as an emergency fund that you tap only if you have unexpected car repairs, house repairs or other major expenses. Without savings, any unexpected circumstance could upset your finances.

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