Don't Spend What You Don't Have

2. Make a realistic budget

While it's not necessary to live like a pauper, it is smart to get a handle on your cash flow. That means creating a realistic home budget. Take a hard look at how much income you've got coming in the door each month, and what's going out.

Small changes in your spending habits can go a long way. Skipping Starbucks in favor of home-brewed coffee can save up to $50 a month. Switching to basic cable from a premium package can cut your monthly bill by up to $40.

3. Get help

The financial impact of the Great Recession has been felt far and wide, but credit counselors say older Americans have been particularly hard hit by the economic downturn. Nest eggs have shrunk and jobs for older workers remain scarce. So if you're grappling with debt, you're not alone — and you shouldn't be embarrassed to ask for help.

Find a free or low-cost credit counselor who can explain your options for dealing with debt. Two reputable organizations are the National Foundation for Credit Counseling and the National Foundation for Debt Management. Beware credit repair scams. Legitimate credit counselors can't and won't promise to eliminate your debt instantly in exchange for a high upfront fee.

Lynnette Khalfani-Cox is the author of Perfect Credit: 7 Steps to a Great Credit Rating. You can friend her on Facebook or follow her on Twitter @TheMoneyCoach.

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