It happens to the best of us. You lose your job . . . your investment portfolio takes a nosedive . . . your debt gets out of hand . . . or you’re facing divorce. Whatever the financial setback, taking corrective actions early will help you weather the storm. The California Society of CPAs (www.calcpa.org) offers the following guidelines for coping with financial problems.

It’s important to look realistically at your situation and bring the family together to discuss the matter. Children sense difficulties at home and being uninformed only increases their anxiety. You should work together, as a family, to decide on a plan of action.

One of the greatest challenges involved in managing a financial crisis is realizing that you cannot spend the way you did before. Careful planning and wise spending decisions are critical to maximizing your income. If you are faced with reduced income, cut back on spending and develop a plan for paying your bills.

First, add up your current monthly take-home income from all sources. Consider whether other family members can contribute income from a job, dividend, rent, or other sources. Then compare the total of this income with the total of your monthly expenses. Budget for the most important items: such as housing, utilities, insurance, food, credit payments, transportation and medical care. Remember, some bills are only due a few times a year, so you’ll need to set aside some money each month for those expenses.

If your expenses exceed your income, figure out the most important things you must spend money on and give up, reduce or delay less important expenses. Borrow only as a last resort. And don’t make any quick decisions about your retirement money. If you tap into your retirement funds, it's possible you’ll pay income tax, a significant penalty and jeopardize your financial future as well.

When your income can’t meet your expenses, do not ignore your bills. Contact your creditors and try to work out temporary repayment arrangements. In most cases, businesses are willing to negotiate, but you must take the initiative. Offer to pay a realistic amount until you get back on solid financial footing. Be careful not to overestimate how much you can repay. If you don’t keep in step with your agreement, the lender may seek repayment through other means, such as legal recourse.

If you’ve lost your job, one of the first things you should do is apply for unemployment benefits. Each state has different eligibility requirements for unemployment insurance and benefits. Depending on the state in which you live, you may apply by calling, visiting, or accessing the Web site of your local state unemployment agency.

Take advantage of job training, counseling, money management classes, government programs, and community resources that can positively impact your financial situation. If your debts become unmanageable, contact the Consumer Credit Counseling Service nearest to you.

Coping with the stress and pressure of reduced income is not an easy task. There is often a great deal of emotion involved in financial setbacks. Take the time to assess your financial situation and determine whether professional help makes sense. A CPA can provide overall financial advice that can help you overcome a financial setback.