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I know a lot of people who carry a rather large amount of debt, yet they claim to be frugal. And they are… with small things. They try not to eat out a lot, keep driving that same old paid off car, and watch what they spend on groceries.

But where they go wrong is with the technology.

A lot of people get into debt because they want the latest and greatest technology. This has become particularly prevalent in areas such as home theater, cell phones, video gaming systems and MP3 players. Even people who don’t have a lot of money too often have the latest gadgets in these areas.

And it means they carry quite a bit of debt.

Having nice things is wonderful, but as a rule if it’s making you go into debt you need to rethink your money strategies. For example:

* Do you really need a big screen television, or can you keep using your old one until either it dies or you have the money saved up for the big screen. Try to avoid putting it on credit.

This is particularly challenging for people right now, with the upcoming switch to digital broadcasting that will make some televisions require additional equipment to receive signals. Many would rather just upgrade the whole set. But if you don’t have the money for a new set, be financially smart and start saving. There’s still time, and there are coupons from the government for the equipment to adapt your old TV.

* Video games and movies get expensive fast if you buy them. But if you’re buying several a month, consider a Netflix, Blockbuster or GameFly subscription. Just think how often you really watch even your favorite movies, or how many games you really need to have available to play at any one time. If you’re spending more than the cost of a monthly subscription to one of these services on purchases, they can probably save you money and give you a greater variety.

* Think before you upgrade. People love to upgrade cell phones, MP3 players and such because they want all the new features? How much do you really need those features? Can it wait another year or two?

My own cell phone is 3 years old. It doesn’t take pictures, although it does have a color screen. I’ve never downloaded a ringtone or texted anyone. Sure, some of those features would be nice, but do they matter on my budget? No.

Learning to be frugal even in these areas can be a huge help to your overall financial picture. It takes some self control, and you have to remember that having the latest technology is really not that important. Just think of the money you could save so that you have a cushion in case of a lost job, an illness or other circumstance. Spread out your frugality to cover all the ways you spend your money, while still enjoying your life.

There’s been a lot of talk lately about where the economy is going. Short version for many people would be along the lines of “in the tank”.

That is, things are getting rather rough for a lot of people. Foreclosures, companies downsizing, debts out of control. It’s getting to be a rough time for a lot of families.

I should know. My own husband was just downsized. My income alone isn’t enough to support our family, although I’m working to change that. It’d be nice, you know?

When you have debts added to a sudden decrease in your family’s income, you have to do some fast thinking. You don’t want things to get more out of control than they already are. You also want to lose as little as possible.

And you’d better believe that you want to avoid bankruptcy. Sometimes that may feel like the easiest solution, but it’s not as easy as it once was, and the long term impact on your credit is serious.

The issue people are most aware of right now is what is going on with housing and people’s mortgages. The government has been talking bailout because so many people signed on to mortgages that they really shouldn’t have, and the impact is now showing in a big way. Foreclosures are way, way up.

But whether your money problems are due to miscalculating what you could afford in a mortgage, the sudden loss of a job or some other reason, you need to act fast to minimize the damage.

Your first step should be to look at what you can afford right now. If your mortgage is now out of your range, what are you going to do about it?

With housing prices dropping, this is a tough one indeed. Some people owe more on their mortgages than their homes are now worth.

The ideal, of course, is to start bringing in enough money to be able to afford everything. Finding a second job may be your best way to cope with mortgage problems. This is not an easy step to take, since it greatly limits your free time and family time. But if it’s better than the alternatives I strongly recommend thinking about what you could do.

Of course, if your money problems relate more to being laid off, you are probably already hunting just to get that one new job you need. I really like something a friend told me once about job hunting. She said that movie stars and baseball players had agents, and she wanted the same advantage when she needed a job.

In other words, get help in your job hunt. It may cost some money that you don’t feel you have (and don’t spend more than you can afford!), but if it pays off in a better paying job, that’s an investment. You should at the very least network and be unashamed to tell everyone you know that you’re hunting for a new job. It really can help.

Cutting back is another good plan. Anything you can spend less money on means you have more to put towards debts and mortgages. This can mean living without cable television or internet access for a time. It can mean dropping the cell phone if you’re not trapped by a contract, or your land line phone if you can get by with just your cell phone. And of course there are many other areas you can cut back on, such as eating out.

You should also be willing to talk to your creditors before the problems become obvious. The sooner you can work things out, the better. You may be able to get lower rates on credit cards, do the occasional lower payment, and avoid paying late fees.

Bigger steps to take depend greatly on your family’s situation. Some may be able to get by on a single car rather than having two. With gas prices the way they are right now, even arranging regular carpools with coworkers who live in your area can be quite a help.

At times like this, you need to focus on keeping things from getting completely out of control. A financial downturn doesn’t have to be a complete catastrophe.