Sometimes you have to tighten the belt so much it’s downright painful. Job losses,

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rising mortgage payments and higher expenses for taxes, utilities and insurance are putting a serious squeeze on many consumers.

They may have already cut back their holiday lists and are still strapped. They may have to perform uncomfortable triage like deciding whether to pull money out of a retirement account to pay off the credit card, or choose between the car loan payment and the life insurance bill. They may have to hold off some creditors while making minimum payments to others.

“I’ve been seeing clients having to make all sorts of difficult choices,” says Joseph Montanaro, a financial planner with USAA, an insurance and investment firm aimed primarily at military families. “They have already cut back on expenditures and now they have to come up with money to make the normal wheels turn.” There are better

and worse ways to do that, however. Here’s advice from USAA, and elsewhere, about how to muddle through with the least amount of lasting

damage.

Protect your house: Make your loan repayment and pay your property taxes before anything else. Falling behind on your taxes can cost you your house. Falling behind on your mortgage payment can destroy your credit score, making it impossible for you to get another house or car or credit card.

Deal with taxes strategically: The monthly penalty for not filing your tax return, when you owe taxes, is 5 per cent of the amount that you owe. If you file your return, but can't pay on time, the penalty falls to 0.5 per cent a month. Keep up with your tax filings but skimp on payments if you have to keep other items on your list paid.

Reconsider your car: Do you really need it? Could you cut back on the number of cars your family owns? Or sell your car and buy a cheaper one? If you can't cut back on car usage, make sure to put the car payment as number 2 on your list of items to pay.

Credit cards: If you have the cash to pay all your bills, paying off credit cards should be a high priority. If you don't, you can let balances sit on the cards for a while, as long as you make the monthly minimum payments. If you are in a short-term crunch, you might even tap your credit cards to make sure you can pay those essential mortgage and car loan bills.

Use the wiggle room you may get from your utilities: If you're jobless and hurting, you can usually hold off your gas and electric payments for a few months without too much downside. Most states and municipalities have rules that keep the heat and lights on even if payments are late. This is a desperation measure; it could affect your credit.

Make the doctor wait: Most healthcare companies are used to people paying slowly, or even not at all. But don’t stiff your doctor, simply let her know you can't pay all at once and spread out the payments. Most medical professionals will be reluctant to turn you over to a collection agency or report your slow pay to a credit monitoring company.

Skimp on the retirement plan contribution: This is another only-if-you-really-have-to bit of advice. If your ability to pay your bills over the next few months is not secure, don't make that retirement contribution.

Use prepaid cards: If you are having trouble sticking to your budget, use prepaid phone cards and cash cards.