Our country is drowning in debt and most of us are, too. It's no secret that bankruptcies and mortgage defaults are on the rise. So what do we do? The media would like us to think that we are just bad consumers paying too much money for designer jeans, BMWs, and the latest iPod. But the reality is that most people get in debt because something came up that they didn't have the funds for- something like your medical insurance premiums just went up 50% or you got laid off from your job or your adjustable rate mortgage has now adjusted to sky high levels.

Credit isn't all bad if you use it and manage it well. You can get control of your debt and use it to prosper with these 8 tips:

1) Make sure you have enough cash reserves to handle a lay off or a car repair, etc. At least a minimum of three months gross salary is what I recommend; more if you have a lot of assets or debt. As we are bombarded with advertising messages to get more, buy more, and have more; it's easy to forget how much we can do with less, less, less.

2) Keep your credit score high and up to date. You have to have credit in order to get credit, and a high credit score is a good thing. Find out your credit score with a free annual credit check offered on the web. I buy stuff online all the time so I make a point of checking my credit to look for any unusual purchases that aren't mine.

3) Take out debt for things that can appreciate like your business or your home or not your car or golf clubs. I started my business in the eighties on a credit card cash advance. Risky? Oh, yes. But it was the best investment I ever made, and I continually use short term loans to grow my business. But pay cash for the car and other toys.

4) When the going gets tough, the tough go to Mom and Dad (or Auntie Fern). Make sure that your parents, friends or relatives feel good about lending you money by having the loan structured by an organization
such as VirginMoneyUS. Remember, you are not a loser. You just need some financial help. So set it up right so there are no misunderstandings. I am much more likely to loan money out to family or friends if there is a written agreement about the terms.

5) Take on debt to invest in your most precious asset- you. Your income needs to constantly go up in order to keep up with taxes and inflation. Don't be afraid to take out a loan for classes that will improve your job skills and get you more bucks. I took a 2 year online course from Coach University to increase my skills and be a better Financial Advisor. It's much better that TV and more fun than the local bar. I got to learn new skills, meet interesting people and fatten my wallet at the same time.

6) If you are in over your head, help is on the way. Check out the National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling. Members of these two organizations do not employ commission-based counselors and are more highly regarded than some of the other organizations.

7) People often overlook credit unions. Credit unions usually have lower interest rates on loans for members and are more willing to work with people with bad credit than the local bank.

8) Don't worry about mortgage debt. Keep it manageable but keep it. It is usually your biggest tax deduction. That old school garbage about paying off the mortgage and living debt free- forget about it! Most retirement plans will distribute money that is all taxable. If you paid off your entire mortgage then you could find yourself paying more in taxes than you did when you were working.

Keep in mind that almost every big purchase that you will make in your life- your home, your car, your loans, your investments-may involve a commission salesperson. So it pays to be skeptical and cautious. The old adage- if it sounds too good to be true, it usually is-still applies. Take your time, take a deep breath and use your intelligence to make the right decision for yourself. It will pay off.