Do you feel as if you're in a money trap? Well, you're not alone. Lots of people are finding themselves in debt, but you don't have to stay there. Five tips to help you take control of your money and live a fuller, more enjoyable life.

We’re in a recession, we’re not in a recession. Depending on who you listen to and what barometer of measurement they use, we’ve either been in a recession since December 2007 or the country is still on the outside of one looking in. Perhaps we’re somewhere between the two.

Regardless of what the experts say, what it all boils down for the average consumer is where they’re at financially. Some people are employed and expecting bonuses this month, others are holding onto a job and facing a pay cut, salary freeze, or even the threat of losing employment, while still others are unemployed and are now looking for work.

For every consumer, controlling personal finances is the key to monetary health, a way to build up wealth and an important strategy in gaining independence. After all, if you’re in debt then you basically are owned by your creditors. And, forget bankruptcy as a viable option – changes to personal bankruptcy laws a few years back has made that a bad option for most people.

What can you do to get your debt under control? Several things including the following:

Pay off credit cards – Lots of people are carrying around credit card debt and paying big bucks in interest each month. If you are running balances on several cards, try not to add additional debt. Pay off the card with the smallest balance first and then use those funds to attack the next largest balance. Your debt repayment will “snowball” as you knock out one increasingly larger balance at a time.

Renegotiate interest rates – If your credit cards charge high interest rate and you cannot get a new card with a low rate (to transfer balances) consider asking your credit card issuer to lower your rate. Be careful if you ask for a “hardship rate” where your interest will be knocked down to zero in exchange for automatic monthly repayments – some card companies report this information to the credit bureaus which can adversely impact your credit report or score.

Pay down your mortgage – If you have a home equity loan or a mortgage (or both) work toward paying these debts down faster. Housing prices have dropped, a lot of homeowners have negative equity in their homes, and if you should need to sell, you’ll have more profit to show if your overall home debt has been reduced.

Trim spending – Whether laid off or on the receiving end of a salary drop, you’ll need to trim expenses accordingly. Now is the time to shop around for the best deals on insurance, communication, food, etc. in a bid to keep your expenses in line with what you make each month.

Take charge – Banks and other lending institutions are clamoring for consumer dollars, especially ever since credit has tightened. Make sure that you aren’t paying an annual fee for a credit card, that monthly bank fees are reasonable, and certainly don’t agree to pay other charges which are unreasonable. Threaten to take your business elsewhere if the lender won’t budge.

Some analysts are suggesting the current economic climate will last until next summer with others suggesting that early 2010 will be the soonest date when we’ll see some relief. No one can say for certain when the economy will improve, but don’t wait to act: you can take control of your finances today!

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Photo Credit: Nusrin

Tags: credit, Credit Cards, debt, Debt Consolidation, employment, job, job loss, money, personal finances, recession