When economic challenges come, there’s a tendency to either panic or do nothing. A better alternative is to take calculated financial steps to navigate uncertain times.

1. Prepare to get by with less government help.

The U.S. is on an unsustainable fiscal path. The national debt is $15 trillion and growing. That figure “doesn’t include America’s obligation to make Social Security payments to future generations,” Business Week states. In addition, another challenge to America’s economic health is “sharply rising per-capita health-care spending.”

A couple of generations ago its fiscal status was different. The U.S. was a creditor nation to other countries. “Now, it has minimal reserves and huge foreign debt,” says Martin Weiss of Money and Markets. He says that Washington is limited in its ability to save the U.S. economy.

There’s no doubt that adjustments need to be made to stabilize the fiscal gap.

New York University economist Nouriel Roubini says that to deal with widening deficits “you have to commit to a medium-term plan. You have to cut spending and raise taxes.” He adds, “You have the fiscal drag at the state and local governments. And at the federal level, the stimulus is going away and QE2 [quantitative easing] is going away”  (Moneynews, July 2011).

Federal help is tapering off. With declining revenues, local and state governments are finding it harder to balance the books. Some public-sector services and jobs have been cut. In the future, an even larger debt crisis could hit the federal government.

Plan for less government help by diversifying revenues of income, pre-retirement as well as post-retirement. More reliable income may come from self-employment and extra income. Expand work skills.

Find ways to be more connected with your community. Scott Burns, of AssetBuilder Inc. says to “discover the gigantic non-money economy of community, where the more connected you are, the safer you and yours will be.”

2. Get the balance sheet in order.

Manage cash flow. Cut back on discretionary spending. By planning, modify expenses to cover present needs and have money left over to pay down debt and to save.

Begin by using last year’s expenses as a basis for spending. How much was spent on housing, food, and transportation? How much were insurance costs?

List all the expenses. Remember to write down everything you spend. Cash transactions can be hard to track, so keep receipts for accurate records. Compare monthly expenses to income and quarterly expenses to income.

Analyze spending. The goal is to spend without using credit. Have a spending plan based on income, not on what is borrowed or charged.

Examine what lifestyle changes need to be made for a balanced budget. Make needed decisions and adjustments as a family.

Boost savings as you cut spending. Have a set amount of money automatically pulled from your paycheck or bank account. This can go to an emergency savings account and other accounts.

Set goals and stick with them. Enjoy the many benefits of being a smart money manager.

3. Reduce debt.

When the economy was booming, millions of people abandoned caution and overextended themselves. With an “irrational exuberance” they acted as though debt didn’t really matter. Over-leveraged, many people are still struggling to get by.

How can future financial constraints be avoided?

Pay down expensive debt now. Do whatever it takes to eliminate debt.

Pay off credit cards. Begin with high-interest cards. The average card charges 14% interest. Rates for subprime borrowers are much higher at 24.9% (Wall Street Journal). While paying off the card balance, stop using credit cards. This will cut down on impulse purchases.