More and more North Americans are living paycheque to paycheque, watching our bank balances rise and fall with the furrowed brow of a stressed stockbroker watching tech stocks bottom out. Worse yet, many of us don't have the basic knowledge we need to keep our finances under control and keep ourselves out of debt.

That's the premise behind John Ventura's book, Beating the Paycheck to Paycheck Blues (Dearborn Trade, 1997), an accessible guide to steering clear of financial woes when money is tight, and how to work your way out of debt when it begins to pile up. Ventura, a successful bankruptcy lawyer as well as an author, has these tips to offer on avoiding the paycheque syndrome:

Q: What are the biggest, yet most common, mistakes people make with their finances?

Carrying too much debt
“The cost of debt is horrendous,” Ventura says. From owning a home you can't afford to carrying thousands of dollars in debt on credit cards, many of us are struggling to meet minimum payments without realizing how much debt costs us in the long run. For example, even if you always make the minimum payments on the $2,000 you owe to a credit card company, over the course of 20 years, you will have paid them roughly another $4,000 in interest. People also don't realize the “real” cost of home and car ownership, and are crippled when a $500/month house payment becomes $800/month with maintenance and utilities.

Not having any money in a savings account
“So many people are just one paycheck away from defaulting on their debts,” Ventura explains. This could be avoided if some reserves were kept in savings. Start small by buying savings bonds, and build from there.

Q: What are the key steps to living on less and successfully beating the paycheck to paycheck blues?

A positive attitude
Whatever your circumstances - whether you've lost a high-paying job or your expenses have exceeded your income - Ventura stresses the importance of remaining positive and starting to think rationally about money. Re-define your idea of success so it has less to do with material wealth and more to do with personal happiness and security.

Budgeting
Understand how you spend your money. Record your various expenses every day for a month and then examine your spending history to see where you can cut back. “It's usually a shock to most people - ‘I spend $40 a month at Starbucks?'” Ventura says.

Adopt simple budgeting techniques that work for you. It can be as involved as devising a spending plan of where and when money flows in and out of your household, or as simple as dividing your paycheck between separate envelopes labelled with different expenses (ie. rent, food, etc.) and putting whatever is left over into your savings account.

Know how to make more money
Identify ways to bolster your income, either by upgrading your skills through education and finding a better-paying job, or by taking on extra work or a second job. Don't refuse a job simply because it doesn't pay as well or better as the one you may have lost - those bills have to be paid somehow.

Know your options if you are in debt or facing bankruptcy
“A lot of people panic and freeze up when times get tough financially, and end up making bad decisions,” Ventura explains. If you know your options ahead of time, it's much easier to cope. Sell off all extra sources of debt - like a house or car you can't afford or contacting creditors and arranging lower minimum payments on your debts. These measures can help you dig your way out of trouble and avoid the last resort, declaring bankruptcy. To remedy the problem in time, you must recognize the signs of impending financial woes - like living off your credit cards, only making the minimum payments, and having to dodge irate creditors.

Know how to re-build your finances after serious money troubles
Learn how to live on little to no credit, or how to rebuild your credit by securing and paying back a series of bank loans or the balance on a secured credit card. Re-establish yourself financially by proving yourself trustworthy with money.

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