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We've been married 21 years and have 6 kids. My husband was self-employed, but that ended two years ago, leaving us bankrupt. We had a house, but now we're renting. We have a hard time even saving $100 a month. Should we forget the idea of home ownership? We feel like we can't get on top of our finances.

Last Updated: January 13, 2009

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There are only three sustainable ways to improve household cash flow: increase income, decrease expenses, or do a little of both. Other strategies, like having a garage sale or getting a tax refund, are one-time events. When the economy is bad and/or you've had prior money troubles, it is quite normal to feel that your financial situation is hopeless. The best way to fight those "everything is out of control" feelings is to control as many things in your life as you possibly can.

Track your spending for a month or two and see if there are any additional spending cuts you can make, especially on "little things" that add up over the course of a month. Then make those spending changes. You might also consider ways to increase your income such as a second job or overtime.

Research has shown that some people who take control of one aspect of their life, such as their diet, exercise, and weight, feel an increased sense of empowerment about other parts of their life as well. This can be especially true for relationships between health and finances because, not only could you feel more in control if your health improves due to healthy lifestyle changes, but, if you eat better and/or eat less, you'll spend less money on food.

The most important thing to remember is that you can control the direction of your life and take charge of your finances. Every small step that you take will make a difference. As for the bankruptcy, it should drop off your credit history within 10 years and will have less of an effect on your credit history over time.

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