Words like "recession," "crisis" and "collapse" are running rampant through the news. But by my own financial forecast, things are looking up.

In addition to providing a much-needed wake-up call -- hello, overspent readers! -- the bumpy economy is leading many of us to develop financial muscles we didn't know we had.Take Jennifer Vos, who says the economy, along with her decision to join an online debt reduction support group a year ago, has helped her and her husband to make the tough choices necessary to get their financial lives in balance.They run a home-building company in Oregon and saw the effect of the U.S. real-estate implosion firsthand, Vos says. With the numbers on the wall, she and her husband decided it was time to scale way back."Basically, we just downsized," she says, describing how they sold a truck, a trailer and a piece of investment property and used the money to shed $102,000 worth of debt.

Not only that, but they have managed to save about $22,000 in personal and retirement accounts this past year, Vos says."The economy may be worse than it was in 2007, but I feel very confident that we are living smarter and happier than a year ago," she says.

A life you can afford
Other people are scaling back by looking to the past. One member of the online support group says she finds herself taking the attitudes of older generations that didn't grow up with our easy access to credit and expectations of instant gratification.

"I think those folks might've had it right," poster "CapnG30" wrote on the message board. "Today, people are really evaluating whether we need all this 'stuff.'"

Suzanna De Baca, the president of Private Capital Solutions Group, a financial advisory firm in Des Moines, Iowa, is seeing it, too. De Baca, whose clients range from middle-class to downright rich, says she is finding people "at all levels taking stock of their budgets."

Part of that process is adjusting expectations.

"Before, when people had money, they spent it, and they didn't really know where it went. But look what's happening to Starbucks," De Baca says, referring to the wave of store closings across the U.S. "People are taking steps to cut out the frivolities.

"The fact that Wal-Mart had record earnings tells me that people are pre-emptively changing their habits."

Our grandparents would roll their eyes at the idea that living within your means might require people to make radical lifestyle changes. Maybe we're lucky: We're getting a little fear in our hearts and changing our ways without having to face a real depression.I've noticed that even people who don't need to worry are cutting back. A close friend, who is financially prudent and makes a six-figure salary, admitted she is hand-washing rather than dry-cleaning as often, cooking more of her meals and scaling back on treats like pedicures. She even wondered aloud to me whether she should be saving more than she is.

It's interesting. On paper, my friend is saving plenty and doesn't need to be economizing. But the current climate has made her realize that a life of little luxuries may not be smart, especially when her good fortune would allow her to save more and still have splurges.

No dishwasher? No problem
The financial anxiety in the air has me hunkering down, too.

In May, I joined a group of women "racing" online to vanquish their debt once and for all. My debt was about $6,400 then, and now it's down to a sweet $3,400 -- light at the end of the tunnel.

But my reason for joining the group wasn't just to get out of debt. It was to free a monthly chunk of cash so my husband and I could nail a bigger goal: total financial security.

With the economy in a swivet, reaching that stability has become paramount for both of us. Like many of those in the group, I've been worried about layoffs and job changes.

It has taken me more than a year to save close to a month's worth of living expenses in my emergency fund -- about $5,000 -- and once our debt is gone, we plan to triple that amount in the next 12 months.