Money problems have been a big concern over the past few years for a large number of people.

With so many people experiencing layoffs, cutbacks in working hours, underemployment, and stagnant wages, it has become difficult to make ends meet for millions of people. All this, along with the large debt load that so many people carry, money problems are a reality that just never seems to go away.

Cutting Back Won’t Solve Your Money Problems

So when people start experiencing financial problems, what is the first thing they usually do?

They start cutting back on cable TV, expensive coffee, meals at restaurants, and other things that can save a few dollars quickly, thereby reducing their impact on the family wallet.

This is what virtually every personal finance guru recommends as a first step in tackling money problems.

However, this initial step is where too many people stop. They never really  take the further steps necessary to changing their money problems for the better.

It’s not all that difficult to cut back your spending on some items, but where does that really get you?

Sure, cutting back on expenses can put you in a little better financial position. However, the heart of the problem is usually much deeper than cutting back on lattes’ and nail appointments can fully solve.

The Usual Causes of Money Problems

Usually the money problem at hand consists of one or both of these two things:

  • Too much debt
  • Too little income

So what should you be doing if you have one or both of these problems?

First, recognize that cutting back is a good first step, but it won’t completely solve your money problem permanently. If cutting back on expenses is all that you do, you’re doing nothing more than putting a bandaid on a situation that really needs surgery.

Next, understand that you need a solid plan in place to tackle the real source of your money problems.

Tackle Your Debt

If debt is part of your money problem, then it’s time to start keeping track of every dollar using a written budget. This is always the most effective way to keep track and understand where your money goes so you can exert total control over it.

Then make a written get out of debt plan that will act as your roadmap to eliminate your debt problem for good.

Increase Your Income

If you have cut expenses, and you’re still not able to get by very well on what you’re making, your money problems may be at least partially due to the need for more income.

In this economic climate, millions of people are unemployed or underemployed. Because of that, most of those people need a plan to increase income in order to make ends meet.

One of the first things you have to do, is to recognize that the job market has fundamentally changed. Because of  that, many of the tried and true rules of finding a job and maintaining a career no longer apply in today’s working world.