Limit Your Spending in the New Year (Get out of Debt)

Every year, the National Foundation for Credit Counseling counsels close to two million American households nationwide. Whether they seek financial advice or choose to enroll in a debt-repayment plan, many of these families or individuals carry thousands of dollars in debt, often more than their annual income. Check with them first if you just don't know where to turn.


Credit Card Debt

• Limit the amount of cards you use. If you are really scared to use them, cut most of them up and keep one stashed away and keep one in your wallet/purse. It's best to only keep your debit card with you, so when the urge arises, you know that you can only spend so much from your bank account.
• It's best not to close all your cards, since you still need to keep your credit looking good, and in order to have it look good you do have to spend and use your cards; just pay them off in full when you get the chance.
• Transfer your balance from a high rate card to a low rate card.
• Try to negotiate a lower rate. This is certainly possibe if you have good credit.
• Vist Credit Card Nation, this site estimates the time it will take to pay off your credit card debt.

Home Debt

• Contact your bank or financial planner to discuss your situation and options. They maybe able to help you with money management issues.
• Refinance. It seems harder right now to do, but if you have an adjustable-rate mortgage (ARM), it doesn't hurt to find out if you can refinance it to a fixed-rate mortgage.
• If you are in danger of foreclosure, research to see if you have any alternatives. You may be tempted to cut your losses and move on, but visit the U.S. Department of Housing and Urban Development’s  site to research other options.

Handle Student Loans

• Consolidate your student loans. Try to lock in a reduced interest rate to make your monthly payments more manageable.

Budget your finances. This might seem obvious but it's a tough thing to do. You may have to be strict for a while; but being strict for a short while might be all the difference in the world to improve your life for the better in the long term.

• Do you have to go out to eat every day/week? Pack a lunch instead.
• Limit shopping sprees to once every few months, except for your essentials (i.e. groceries, paper products, medicines, etc).
• Instead of spending money on going out, stay in and rent a movie.
• Instead of formal family pictures at a studio, set up your camera in your home and send it to picture developing site; it's a lot cheaper and more relaxing (trust me!).

There are many ways to eliminate unnecessary spending. Think of what is essential and what is extra and then eliminate/reduce the extra to 1-3 times a month/year.

Please also note that with all of the scams out there, be very careful with whom you deal with. Do your research before signing up and giving money to anyone. Go with your gut instinct and to be safe, go with a reputable (well known) bank or lender.

Here's to a wealthy 2010 for us all!

Marlin