With more than five million households using credit cards to pay for household bills we consider the options available if you find that you are running out of money before the end of the month.

Despite recent reports of economic growth, average family incomes are tight. Shorter working weeks, wage reductions and increasing prices such as the cost of fuel have stretched family budgets to the limit.

Worryingly, more than 5 million homeowners are now using credit cards to pay at least one household bill each month according to a recent survey conducted by moneysupermarket.com. If incomes were to start rising, this problem could be eased. However, it is my belief that this is not going to happen any time soon.

Private businesses have just come through the worst recession for years and those that have survived are unlikely to want to increase costs by increasing wages and employment until it is absolutely necessary. In the public sector, the government’s six billion pound cost cutting exercise could result in up to 750,000 redundancies, putting an even greater strain on many families.

So if you are having a tough time financially and are finding that you are currently using credit to supplement your income every month, what can you do?

Reduce your expenses

The first and most obvious thing is to focus on cutting down on your monthly expenditure. You may feel that you have already taken steps in this area but it is always worth reviewing the situation again.

The best way I have found to do this is to list out all of your monthly expenditures on paper or by using a spreadsheet. By doing this, you may be able to identify new areas where you can consider making cuts.

Of course reducing your expenses is easier said than done. If you know that your living expenses budget cannot be reduced any further, it is then time to consider what you are paying out each month in credit card and other personal loan agreements.

Reduce your debt repayments using debt management

As the cost of payments on personal credit such as cards and loans increases, many people find themselves getting into a downward spiral of debt.

The payments on the cards have to be made meaning there is not enough money for the household bills. The cards must therefore be used again to pay for household items and so the cycle continues. If this situation is not stopped, debts continue to grow and monthly minimum payments continue to increase.

In general the only way stop the cycle is by using a debt management solution. Many people view debt management as an absolutely last resort, something to be avoided at all costs. However, these solutions are very often the best way to break a debt spiral and stop the situation getting worse and worse.

They are primarily used to reduce your debt payments. Once implemented there is no longer any need to supplement income with credit spending as all reasonable household living expenses can be paid out of your available income

Finding yourself in a position where you are using credit each month just to keep your head above water can be a frightening place.

Unfortunately the only way to resolve this problem is either to increase your income or reduce expenditure. Realistically speaking, most families are unable to do either of these things as wage increases are unlikely in the near future and the cost of living is actually going up.

For this reason, considering a debt management solution, however difficult this is to come to terms with, is often the only way to stop a reliance on credit which will otherwise just continue to get worse.