Credit creates the illusion that the buyer has money and often the purchase is put out of mind before the bill is received. Sometimes, it is only at the time the bill is received that the financial reality of the purchase sets in.

Using your credit cards as a necessity rather than a convenience is one of the early warning signs of financial difficulty.

Other warning signs are continually going over your spending limit; borrowing money from friends and/or family to make it from one payday to the next; constantly receiving notices about your overdue accounts; taking out a consolidation loan to pay off your credit cards, only to build up the card balances again; harassment from creditors and collection agencies; garnishments of wages; and emotional distress from financial pressures that affect your health, job or marriage.

Here are some money management tips:

• Prepare a monthly budget that shows your net income and expense. If your expenses are more than your income, you probably have to cut back on your expenses. Stick to your budget, especially when cash is tight.

• Include an "an emergency" provision in your budget, so that cash is available, if needed.

• Reduce spending. Think of ways not to spend money so that you can reduce your expensive credit card debts. Reducing your debt balance will also reduce your interest expense, thereby freeing some cash which will allow you to pay down the actual loan or debt.

• Be a comparison shopper and an informed consumer. Don't buy on impulse. Be cautious of TV, telephone and door to door sales. Make sure that when you buy you have researched both the product and the price thoroughly.

• Don't invest money you can't afford to lose. Don't use the rent or food money to put into risky investments. Invest with money you can afford to lose should the investment turn bad.

If after doing the above you find your self saddled with an unmanageable debt load, then you likewly should talk to a financial advisor or a Trustee in Bankruptcy.

As a bankruptcy Trustee with over 25 years of experience, I have met with many individuals to assess their financial situation. Although each person's situation is unique, the areas I usually review with those I meet include:

• Ways of increasing their income
• Whether assets can be converted to cash
• Merits of a debt consolidation loan
• Starting on a Debt Management Program with a credit counsellor
• Making an informal arrangement with creditors
• Filing a formal proposal to creditors
• Bankruptcy

Although at first glance some of these options may appear not to be applicable to you, it is only after understanding them do people recognize that the options may provide realistic ways of dealing with their financial problems.

Facing your financial difficulties is important. Exploring and understanding your financial options allows you to begin to take control of your finances and get your life back on track.

Linda Stern is a vice-president and trustee in bankruptcy at Mintz & Partners Limited. She is responsible for the personal insolvency practice at Mintz & Partners Limited, consulting with individuals with financial difficulties and advising them on available options.