With record foreclosure rates, stock market woes and unemployment on the rise, ensuring financial stability and managing household finances is more crucial than ever.

With record foreclosure rates, stock market woes and unemployment on the rise, ensuring financial stability and managing household finances is more crucial than ever.

It's fun to be a consumer, say area financial gurus, but only if it's within your means. Paying down excessive debt can free up money to better plan for retirement, create an emergency fund and better manage household expenses.

Too often, households boast more debt than income, resulting in a frustrating juggling act each month, says Medford certified financial planner Al Densmore.

"For the first time since 1952 we had a month recently, it was November, where Americans paid down debt collectively," he says.

"That hasn't happened in 50 years. That tells you where everybody's mindset is. From the initial shock of gasoline prices to the potential loss of jobs and income, I think everybody now is kind of hunkering down a little bit."

First and foremost, the only clear path to doing away with debt is creating — and sticking to — a household budget. Have an awareness of income and expenses, choose to cut back on unnecessary splurges, like that $4 daily latte, and make a commitment to focus on debt reduction.

"Once they see it in writing, they start to get a picture of where their money is going and then they can categorize and prioritize where they want money to go versus where it's going now that they're not really thinking about," says Mike Harris, a certified financial planner for Blue Rock Financial Services in Medford.

Perhaps the biggest step towards reducing debt is to pay beyond minimum monthly payments on credit accounts, especially those with high interest rates.

Harris says, "Take a look at the different kinds of debt you have and try to make the most impact on your situation. High interest debt — or if you have a lot of small bills you're paying each month — try to consolidate those and get them paid off first."

Adds Densmore, "And when you get one paid off, take the money you were putting towards that bill each month and roll it over onto another to pay it off sooner."

In the interest of becoming debt-free, avoid acquiring new debt, say Densmore and Harris, unless a valid use, such as upgrading old and inefficient appliances or windows to cut down on energy costs.

And don't fall for specials that boast "no payments for two years" or "interest free."

Taking advantage of a good deal is OK, says Harris, but have a fail proof plan in place for repayment before any deadlines.

In addition to managing existing bills and not acquiring new ones, reduce fluctuating costs like utility and grocery bills where possible. Turn the heat down during the day, budget groceries more carefully and cut out "frills." Any savings over budget amounts can be put towards credit accounts or loans to do away with payments even faster.

Also, don't forget to contribute to savings and to keep an emergency fund firmly in place. "It's important not to get overwhelmed. One thing that usually happens is people worry so much about debt that they don't think about putting a little away each month for an emergency," Harris says.

Finally, despite a faltering economy, Densmore urges families not to shy away from long-term investments like refinancing a home for a lower rate (thus reducing monthly payments by hundreds of dollars each month)

"Yes, we're in rough economic times but the people that will do best are those who are not frozen by fear "¦ but those who make strategic investments to save themselves overhead in the future. You can spend money and focus on your finances, but do it strategically," he adds.