The first step to living graciously when money is tight is knowing exactly where you stand.  Tough economic times are not the time to put your head in the sand and hope it all goes away.  In all honesty, it won't even make you feel much better.  Taking action is far more comforting than hiding.

The basic keys are knowing what your income is and what your expenses are.  This evaluation will give you a important insight into your situation.  If your expenses are higher than your income, your actions must be more drastic.  Living in a deficit spending situation for any length of time is only acceptable for governments who can print money.  I strongly discourage expressing yourself artistically by printing money as it's impossible to accessorize those orange prison jumpsuits and prison air is horrible for your complexion.

Things are scary right now.  Take a look at your savings accounts, your retirement accounts, your insurance policies, and your mortgage or renter's documents.  If you rent, check to make sure that your rental's owner isn't moving toward foreclosure.  Know your rights if he is. 

If you are having trouble paying your bills (mortgage, credit card bills, student loans, etc.), call your lenders immediately.  Many lenders are willing to make accommodations.  If you are way behind, they maky be less likely to be accommodating.

Knowledge is power.  It lets you plan and be pro-active whatever you face.

Tomorrow, we'll talk about planning.  On Wednesday, we'll look at saving at Christmas.  Thursday will be cooking on a tighter budget.  On Friday, we'll wind things up with a discussion of entertaining on the cheap.