Personal Finance Advice and Financial News

In Debt Over Your Head These 5 Simple Steps Will Help

The next 5 steps are not difficult. They only take commitment. You can do it. The feeling of freedom and success when the bills are not hanging over your head will make this all worthwhile.

Ready to get stated? Let's go.

Step #1. Work out where you are now

You may not have looked at your financial position for a while. Maybe that's why you are suffering under a load of debt presently. But you need to take stock of your financial position now. Unless you know where you are now, it's hard to work out how to fix things.

Just get a pen and paper and all your credit card bills and look at the situation honestly. List out all your debts and their interest rates and the minimum monthly repayments.

Don't get worried about how much you owe. It's been said that anyone can get rid of all their debt within 5-7 years, including their mortgage. That means you too.

Step #2 Stop spending more than you earn NOW

This is the first thing that must be done to start the ball rolling for your financial success. This is most probably the reason you need to take action now. Look at your living expenses and cut out those things you can't afford.

Also cut up all the credit cards except one for emergencies and commit yourself to only spending what you can afford from your own income.

Step #3. Find some cash to pay down those debts

Once you have come to grips with Step #2, the next step is to work out ways to put some money aside every week or month to start paying down those debts, preferably faster than the minimum monthly requirement. Pay as much as you can. It's better to pay down these debts than to put the money in the bank. This is because the credit card interest is a lot more than you can receive from the bank for funds on deposit. The aim is pay down the highest interest debt first.

If you have 2 credit cards with the same interest rate, pay off the one with the smallest balance first. That will give you a boost and the resolve to keep on going.

Step #4. Build a Savings Fund

Once you have those credit cards under control it's time to think about putting some funds aside to start building some savings. You'll be surprised how fast your money grows if you religiously keep adding to the balance and don't touch it. If you really need to purchase an expensive item like furniture or car it is better to save for it than to borrow, if at all possible.

Step #5. Pay Down That Mortgage.

Since the interest rate on your mortgage is usually a lot less than credit card and store debt you can leave this item till last. Also it is increasing in value over time - unlike your car, TV, Video, furniture and boat. You will be surprised how many years you can cut off your mortgage repayments by just adding a few extra dollars each month to the payment.

These a just a few basic rules to help you get back on your feet financially. The main principle here is to work on reducing your credit card debt. Once that is done use those freed up funds to build your nest egg and pay off the mortgage. That's the plan that works.

Now get those documents out, do the sums and start on your road to financial freedom.

Little Steps Can Add Up To Big Savings At The Pump

Everyone is looking for ways to reduce "gas pains" from high fuel costs. There are some easy things you can do to put yourself on the road to gas economy.

• Light on the Pedal-Ease on the accelerator when you start from a red light. Your car will run leaner and won't use as much gas. On the highway, run about five miles under the posted speed limit to save.

• Crank the A/C-It used to be true that not using the air-conditioning (A/C) in warmer months would save on fuel economy. That's not true anymore. With the aerodynamics of today's vehicles, by turning off the A/C the resistance created by the wind causes more drag on the vehicle when the windows are rolled down.

• Use the Right Fuel-Never use a higher octane gasoline than your engine needs. It's like trying to put 16 ounces of fluid into a 12 ounce glass. Use the right octane and you can save about a dime or more per gallon at each fill-up.

• Keep Up the Pressure-Make sure you have the correct pressure in each of your tires. With too little air in the tires, the friction that it takes to roll the car is much greater, thus reducing fuel economy.

• Keep It Clean-Keep your engine clean of debris by changing its oil and fuel filter.

• Get It In Gear-Most modern transmissions are electronically operated by controllers. Transmission fluid that's broken down may keep your car from going into its highest gear. Have the transmission fluid changed in the 36,000 to 50,000 mile range.

• Stir It Up-There are lots of different gadgets on the market that claim to increase fuel economy. In all of our testing, we have virtually found no improvement in anything, with one exception. It is a device called Tornado that's put into the air intake, closest to the throttle plate, and stimulates the air to get it really turbulent. That causes a good fuel atomization within the engine itself that caused an increase in fuel economy in the applications we tested by an average of one to two miles per gallon.

With gas prices over $2 and approaching the $3 mark, if you can save one or two miles per gallon every time you fill up, that can translate to about $300 or $400 of savings per year under normal driving conditions. I think everybody's interested in that.