Unemployment is on the rise. Companies are downsizing or closing altogether. Not having enough money for expenses nears the top of life's most stressful situations. Deciding which bill to pay first can be daunting because it's difficult to think rationally during a crisis. Through careful planning you'll live through this and become strengthened. It may not seem that way right now, but this is one of those times in your life that is character building.

Here are a few strategies to keep in mind while you decide what to do:

1. Don't wait until you are in financial hardship before taking action.

If you have recently experienced a decrease in income, take stock of your financial situation now. Having a realistic picture is the first step - you have to know where you stand to devise a plan of action. Look ahead for three months.

You should include assets you may have that can be liquidated easily and designate those you don't want to touch. You'll also realize that if you don't cut back now, liquidating some of your assets will be necessary.

Possibilities:

401K - Jewelry - Hobby Equipment - Insurance Plans - Savings - 2nd Mortgage - Antiques

2. What is necessary to ensure your families security in the immediate future?

Decide what is a necessary priority and what is simply luxury. Sorry Charlie, a cell phone, cable TV and the internet does not qualify as necessities. Paying the house payment, utilities, food, and transportation does.

If there is anything left after the priorities, decide what you get the most enjoyment from and allocate the remaining money toward that. If you don't have enough for basic necessities, you have a few choices.

3. Consider your options.

You could consider working two jobs for a short period of time.
Your spouse could get a job or two.
You could sell some of your assets.
A family loan might be an option.

4. Contact creditors and others you owe money to.

This is one of the most difficult tasks but don't procrastinate, it will only become more difficult as time goes on. If it seems overwhelming, practice with a friend.

5. Become familiar with your rights as a consumer and debtor.

Even after you contact them, numerous collectors will be calling you for money. Anticipate it and decide now who you are going to pay first. They can be threatening - and some of that is a reality. Some of it is not however, and being prepared will prevent you from sending money that you might need for basic necessities. Do a search on Google for debtor rights.

6. Don't forget about the IRS or student loans.

The IRS can be ruthless when you are in financial difficulty. You've probably already heard horror stories. Take their threats seriously. Liquify assets to pay them - their interest and penalties can surpass whatever you owe them in principal. Delinquent student loans can affect your future for many years to come and even affect your licensure if you are a professional. Make it a priority to pay them as soon as you can.

7. Don't let pressure from the kids affect you.

Have a family meeting and explain to them that your situation has changed recently. Do it with confidence that you will survive and without needlessly alarming them. Learn to say and mean "no".

8. Take responsibility for your circumstances.

No doubt reality is hitting you in the face. This is no time for unrealistic optimism in denying the reality. Believing that everything will be okay without taking needed action to change your circumstances will lead you to a dead end.

Instead, employ dynamic, intelligent optimism - This is a difficult time for sure but you can be optimistic in believing that no matter how bad your situation seems, through your actions, you can change the outcome for you and your family. "Action" is the keyword here.

Take charge and ensure the optimal conditions for success.

Cathy Gariety is a consultant in stress management. Visit her website at http://www.garietygroup.com for more tips.