When you create a website based on bettering yourself financially, you tend to get a lot of people asking you for financial advice. Go figure! The most common question people ask me though is how they can free up money every month to send to their credit card debt. Through these conversations I have come to the realization that many Americans today have completely forgotten what it means to prioritize. They tell me they’re sending every extra dollar to their debt but it just doesn’t seem to be enough. They say they’re getting frustrated because they don’t feel like they’re making any progress. So I say to them, “Are you really sending every extra dollar to your debt?”

Now I’m not suggesting that anyone shut off their cell phone, internet, and cable service just to spend every Friday and Saturday night at home reading The Total Money Makeover by Dave Ramsey (a shameless plug, I know). I am however; suggesting that you re-evaluate your priorities and determine what are truly mandatory expenses versus not so mandatory expenses. I’ll use my sister as an example. The following items are the things my sister cut from her monthly spending plan in order to free up extra money to send to debt…

• Eating out: $40/week, $173/month, $2,080/year

• Starbucks: $8/week, $35/month, $416/year

• Smoking: $10/week, $43/month, $520/year

• Turning off her land line and using a cell phone: $40/month, $480/year

• Reducing her cell phone plan: $20/month, $240/year

• Reducing her cable plan: $36/month, $432/year

• Shopping for cheaper auto insurance: $40/month, $480/year

Total Money Saved Annually: $4,648!

Some of these ideas might work for you, and some of them may not. The point though, is to get you thinking about ways you can save money every month. If you’re already doing this, I’d love to hear what’s been working for you…

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One of the smartest things you can do for your future is to start planning for tomorrow today! MSN Money has a great retirement calculator that will give you a rough idea of how much you need to save in order to be comfortable in retirement. After answering a few questions you will receive multiple scenarios for where you’ll stand come retirement based on the information you provide. Now I know there are a few of you out there saying, “I’m only 25 years old, what do I care about retirement!” I promise you, the earlier you start caring, the better off you’ll be in the long run. Here’s an example…

• Suppose you want to save $100,000. If you have 20 years, you can reach your goal by saving $3,272 a year at a 4% annual return. Now shorten your time frame to 10 years, and you’ll have to save $6,559 a year and earn 8% annually. The moral of the story is the longer you wait to start saving, the more money you have to put in and the riskier your investments need to be to achieve the same goal!

So whether you’re 25 or 55, this is a great tool and I strongly recommend checking it out!

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If you want to be a savvy consumer, here is the motto you should live by: Shop store brands over brand names! Applying this to your everyday shopping can save you big bucks! Especially when it comes to stocking your medicine cabinet! If you’re the least bit skeptical, next time you’re at the super market compare the active ingredients of your favorite brand name pain reliever to that of the store brand equivalent. They’re either exactly the same, or extremely close! Next compare them in price. I promise you’ll notice a significant price difference! This is because store brands don’t have the large advertising budgets of their counterparts so they can pass those savings on to you, their customer.

Where medication is concerned (prescription or over-the-counter), always consult your doctor before making a change. If you still have questions, you can find some great information at the Federal Trade Commission.

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Let’s face it; most of us are impatient when it comes to finances (I know I am). I want to know exactly where I stand financially at all times, but I don’t always have the time to spend tracking every dollar. That’s where Quicken comes in. They do it all for you! Quicken has an entire line of software products ranging from managing personal finances to rental property. All you need to do is choose which one fits your needs. For most of us, Quicken Starter Edition 2008 (Quicken Starter Edition- Save 17% + Free Shipping) will cover everything you need to keep up with your personal finances. Here are some of the benefits it has to offer…

• Makes online banking easy by bringing all your accounts together in one place with one password.

• See exactly where your money is going and how much you have left over every month.

• Track and pay your bills on time every time.

• Check in anytime to see exactly where your finances are for the month. You can view what you have coming in, going out, and what’s left over each month.

• See a monthly calendar of your paychecks, bills, and expenses to help you get ahead.

• Easily pay bills using Quicken Bill Pay.

• Import your PayPal account transactions.

• Make tax time easy by tracking your deductibles throughout the year. You can also export this data directly to TurboTax come tax season.

• 100% Satisfaction Guaranteed!

Everyone I know who uses Quicken, loves it! Try it out for yourself and see what you think. If you’re not sold, you have 60 days to return it and receive a full refund.

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The key to reaching financial freedom is to change your bad habits when it comes to finances. Here are some tips that can help you avoid the common pitfalls that plague individuals fighting debt…

• Have a Spending Plan: Building a spending plan will allow you to see how much money you need each month to pay for fixed costs, and determine how much discretionary income you will have left over. The issue of discretionary income is where many people fail in their spending plan. That is because most people take the money they have left after bills and place it into categories like entertainment or eating out. This is asking for trouble! You cannot predict the future, and what you spend money on will change for month to month. Instead, decide for yourself where you will use your discretionary income. You know how much you have, and when it’s gone, it’s gone! This is extremely liberating because you can do/buy the things you want, while still being financially responsible. Look under the “Financial Tools” section of my site for some free spending plan forms to get you started. (If you’re married and building a spending plan, read my article Money Fights.)

• Don’t Wait to Start an Emergency Fund: Many people believe you should not be putting money into a savings account when you have debt. On the surface, this makes complete sense. Here’s the problem though. If you have no money put aside, what will you do if an emergency does come up? You’ll charge it! Now you’re right back where you started. Instead, try starting a baby emergency fund ($1,000 - $1,500), and then start attacking your debt. While you’re building this emergency fund, pay only minimum payments on all your other bills, allowing you to reach your goal faster. Now you can dedicate all your extra income to paying off debt, knowing that if something does happen you have the cash to cover it.

• Avoid Balance Transfers: When it comes to transferring high-interest cards to lower-interest cards, you’re better off avoiding this all together. The idea is, you get a card with a lower interest rate than your current card offers, and transfer the balance, allowing you to save money and pay-off your card faster. Unfortunately, most of us will end up using this card at some point or another, and before you know it your introductory rate has expired. That’s how they get you! Now you end up with a higher interest rate than you had on your original card (usually 18 - 20%).

• Avoid Making Minimum Payments: You should never make a minimum payment (unless you are dedicating all your extra income to a baby emergency fund). Even if you can only afford an extra $10 a month, send it. Over time, this will drastically improve your credit rating.

• Avoid Making Late Payments: This may sound like a no-brainer, but you would be surprised how many people fall into this trap. When money gets tight, it’s easy to look at your credit card bill and say “It’s only a $25 late payment fee.” Well, it’s not just a $25 late payment fee. When your account reaches 30 days past due, the lender can place your account in default which can double or even triple your interest rate. Not to mention this will negatively affect your credit report/rating. That’s not all though! Most creditors have a universal default clause that allows them to share this information, resulting in other lenders raising your interest rate as well. If you truly can’t make a payment, talk to your credit card company. Most of them can lower your interest rate temporarily if you notify them before your account goes into default.

• Check your Credit Report Often: At a minimum, check your credit report annually for errors (you can do this for free here). Some financial advisors will even suggest checking it quarterly. Doing this has multiple advantages. If you find information that you feel was falsely reported, you can challenge it (learn more about this here). Also, it forces you to be actively involved with your credit history.

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