The first thing a child will notice about being in debt is the fact they don’t get all the things they used to get or go all the places they used to go. They don’t understand money yet or what it means to be in debt. All they understand is they are getting and doing less (and sometimes, nothing at all.) Explaining this to a child is difficult, but necessary.

A child can’t rationalize the reasons behind getting less and doing less. Because they don’t understand the concept of money and debt, they may think things have changed because of something they did wrong or even worse, they may think their parents love them less for some reason. This is why it is very important to explain to a child about money and debt quickly before these feelings set in.

One way to explain complicated topics like money and debt is through stories. Children love stories and you can tell them about money and debt through a good story. There are books online written on this topic to help parents explain this very difficult to understand situation.

Children don’t understand complex things and this is a complex situation. It has to be broken down to a level they will understand. The first lesson has to be about money in general. What it is, how people earn money, what money is worth and what happens when you don’t have enough to go around.

Another approach is to explain to the child the importance of saving money and not spending recklessly. Some parents don’t broach this subject with a child until they get their first job or go off to college. Depending on your child, you have to make the call on when to start discussing this topic, but sooner is always better than later. Even children as young as three or four can

Kids are more aware of things around them and pick up on things a little more quickly than children in the past. They seem to be growing up too fast and they will begin asking questions at a much younger age than children in the past did.

If you went into debt due to overspending, it is important to teach your child about overspending – what it means and why it causes so many problems. If they learn this lesson now, they are less likely to repeat your mistakes in the future. It will also help them understand why entertainment, toys and treats have been less available.

In the current economic situation, parents all over are trying to make ends meet and you need to take the time to be sure your kids understand a few things:

* They are not to blame for the problems at hand.
* They need to know their parents are doing everything they can to pay the bills.
* Their parents are not mad at them even if they seem to get upset more than usual.

The most important thing to make sure your kids know is how your love for them has not changed and that finances will always ebb and flow. As you take the steps to pay the bills on time and save money, your debt will ease and your financial situation will begin to improve. The kids will then be able to learn how to make smart spending choices, even when there is a little extra money.

The first thing you have to do is to stop worrying about your situation. Worry is a useless emotion and here’s why: If you can do something about it, or if you are doing everything you can already, then there is nothing to worry about. If the situation is completely out of your control and you cannot change that, worrying is useless.

If you can do something about your situation – do it!

What does that mean exactly? If your job isn’t paying enough, get a second job. If you have too many bills and can’t keep up with the payment, call your creditors; they have ways to help people deal with debt.

One of the best things to do is contact a debt consolidation firm. Their purpose is to get all of your debts together, set up a payment plan you can handle and they will do the rest. They will deal with your creditors for you by getting your interest rates dropped or removed completely. This will also get the creditors to stop calling your house and you can rest knowing your bills are being paid and handled.

The next steps are very hard for some people to do because they believe they have failed when, in reality, everyone needs some help from time to time. There is nothing wrong with asking for help when you need some.

Find someone to talk to about your worries. Talk to a close friend or relative, not to just ask for help but to get it off your chest. Sometimes the act of talking about something makes it better and helps you come up with a way to get through the situation. You never know, the person you talk to may be able to offer some good advice or even help financially. If you can’t talk to someone close, consider talking with a debt counselor. Your news is not new to them and they will help you see you are not alone in your situation.

Sometimes you need to swallow your pride and seek help from government agencies. Asking for help is never a bad thing, it means you know you are in trouble and that you can’t do it all on your own. These agencies were put into place to not only to help with money but with advice, counseling and job placement if you need it.

One thing everyone needs to understand about debt is this; it’s not the end of the world, even though it may feel like it at times. If you are losing sleep, can’t eat, feel nervous and worried all the time about money then it’s time to do something about it.

There are literally hundreds of avenues to look into when dealing with stress and all are created for the same reason; to help you see the light at the end of the tunnel. If the stress you are feeling from your debt is affecting other areas of your life, consult with a doctor to help you stay healthy.

2. Coupons: Find them, clip them, save them and use them. Look for stores with double coupon specials. However, if you can find an item on sale even cheaper than with the coupon, go for this route.

3. Gas: Gas stations charge more when you use a card so, save yourself about $.05 a gallon and use cash.

4. More Gas: Look for stations with daily specials such as “$.05 off on Tuesdays” and get your gas there, as long as you can’t find it cheaper other places.

5. Windows: Make sure your windows have a good tight seal around them and keep them locked so no air sneaks in and out.

6. Thermostat: For every degree you set your thermostat below 72 degrees, you can save about 2%-4% on your heating bills.

7. Unplug it: If you have a lot of electronics with clocks on them and you don’t use them often unplug them. They will still draw power from the wall to keep the clock running. Any items with a standby mode should be disabled and allowed to shut off completely.

8. Lights: Invest in fluorescent light bulbs instead of the normal ones. Yes they cost a bit more at the store but, in the long run, they use a lot less energy and they last up to 5 times longer then a regular bulb.

9. Daytime: Open the blinds and turn off the lights.

10. The Morning Commute: Many people get breakfast and coffee on the way to work and that runs about $5-$8 on average. Do that 20 times a month and you just spent $100 – $160 on something you have at home. Take coffee with you and eat before you go to work.

11. Telephone: Look closely at your phone bills; are there services on there you don’t need? Get rid of them! You can actually do this on any service you use.

12. Cell Phone: Many people get charged per text message, if you can change your plan to include text messaging, do it. If you can’t, you can make one call and have a conversation with someone instead of texting and racking up charges.

13. Movies: Movies are insanely expensive! Not to mention the $8 you spend for a bag of popcorn. You can easily spend $60 or more for a family of four. Hit up a Redbox near you for family movie nights. The movie costs you $1 and the popcorn you make at home will be a fraction of the cost.

14. Buy Bulk: If you are grocery shopping and you know you always get the same things, get the largest size you can, assuming it has a long shelf life. Normally, the larger a size you buy, the less you pay per ounce or unit. This means you are spending more at the time, but you are getting more for you money than if you bought the smaller size.

15. Think before you buy: We all make impulse buys; a candy bar here, a soda there. Before you buy something not in your budget just because you want it, think it over and decide if you really need it. More often than not, you don’t.

Here are some tips and suggestions to help you save some money and set up a solid budget:

1. Prioritize You Bills -We all have bills and some are more important than others are. If you have a mortgage, it is your number one bill to pay and you need to make sure it is paid every month. Now get all your bills together and make three piles: 1) Most Important, 2) Important, 3) The lowest priority

2. Grocery Store Shopping – Most of us have more than one grocery store near us. Choose the cheapest one of the bunch and do all your shopping there. If one is running a killer special one-week, go there instead. Don’t feel loyal to any store instead, be loyal to your budget and buy the least expensive of everything.

3. Lists – If you are going shopping, make a list of what you need and stick to it. Get in, get the list done, pay and get out. No impulse buying!

4. Weekly Expenses – Lay out what your weekly expenses are: gas, food, bills, entertainment, etc, etc. Once you hit your budget limit on something, you are done spending for the week.

5. Be Realistic – If you know you need to spend $50 at least on gas a week, allocate $75 for it. If you use it, no problem, you planned for it. If you don’t, you just saved $25! Allocate extra resources for those things you need such as food and gas.

6. Savings – In your budget, you should include a small amount to throw into savings each week. Even if it’s only $20 a week, it’s still important and may come in handy down the line.

7. Coupons – Cut them out and use them everywhere! Look for online deals at stores. Sign up for free club discounts at places. Look for double coupon specials as well.

8. Review Your Bills – If you can modify some of the services you pay for so they are less, do it. Most of the time, we end up not using all the features we pay for on our phones, internet and cable systems. Cancel and change providers if you can get the same for less.

9. Be Energy Smart – Turn off lights when no one is in a room. Unplug electronic gadgets especially if they have a clock on them. Buy energy saving light bulbs and turn down the heat on your water heater.

10. STICK TO YOUR BUDGET! – You made your budget for a reason. Don’t think that just because you saved $40 in one week, it’s ok to blow it the next week. Save every extra penny you can, because somewhere down the line, something will happen and you will need the money you saved to repair a flat tire, buy an emergency phone because your cell phone died or a last minute item for school or work. You will have a much easier time living within a budget if you save where you can for a backup system.

1. Change your oil regularly. Check your owner’s manual for recommended frequency for your particular vehicle. Typically it should be done somewhere between every 3,000 miles or 3 months to 7,500 miles or 6 months. Don’t forget to change the oil filter as well.

2. Wash and wax your car. Try to keep it covered whenever possible by either covering with a cloth cover or parking it in a garage or under a carport.

3. Be sure to change the air filter annually. Your engine cannot run properly if your air filter is clogged. A clogged air filter also leads to fuel inefficiency.

4. Get your transmission fluid changed once every 30 or 60 thousand miles. Follow your vehicle manufacturer’s guidelines as to frequency.

5. Maintain proper coolant levels. If you don’t top off these fluids, you could cause your engine to have a meltdown. Check cooling system hoses regularly too and repair or replace when necessary.

6. Drain your radiator. Refer to your owner’s manual for how often this procedure should be done.

7. Keep your tires properly inflated and get them rotated. Most manufacturers recommend rotating tires every 5,000 to 10,000 miles. Check your owner’s manual for your specific car model.

8. Change your spark plugs. Follow your vehicle’s manufacturer’s guidelines for how frequently the plugs should be changed.

9. Check your exhaust system. The exhaust system not only muffles your car’s noise, but also redirects the engine’s combustion byproducts away from the passengers.

10. Find a mechanic you trust and get regular checkups for your car. Get on a regular maintenance schedule and stick to it.

How can this be done when so many of us are used to buying things impulsively when we want them or going out to eat a few times a week? Think about this – how many times do you buy a candy bar or a soda from a convenience store? How often do you make impulse purchases at the checkout of a grocery store line? Do you run through a drive-thru for lunch several days a week?

These are all things, at the time, only cost a few dollars but a dollar here, a dollar there adds up quickly to being $20, $30 and even $50 a week on things you don’t need at all. These little purchases can quickly balloon out of control.

We also overspend without thinking when it comes to recreation and entertainment; things like renting a video game or going to the movies a lot. We get in the habit of spending money this way, without thinking and it becomes habit over time. Most of these expenses are things we don’t need and we can save a great deal of money by eliminating them. Let’s look at an example:

Jon makes $1000 a week at his job and his bills total $700 a week. He also has to put gas in his car, buy food for his family and feed his dogs. After the bills and his other expenses, he is left with about $50 a week. If Jon’s only thought was, “Hey, that’s dinner out for the family each week,” he would be considered to be living above his means.

If you are on a tight budget, you’ll have to sacrifice some things you used to spend money on regularly. Instead of paying $50 or more at the movies, rent one and watch it at home. Instead of going out to dinner, cook at home and save a lot of money.

If you can’t pay cash for something you want without sacrificing paying a bill or buying food, then don’t buy it. If there is something you really want, you’ll have to save up the money over time until you are able to make the purchase. If you only make $500 a week and you have bills to pay, you can’t afford a $200 a week car payment; you just might have to buy a cheaper car. It may not be what you want, but it is in your means to pay for it and it works. Living within your means involves sacrificing many wants in order to pay for the needs.

We all have limits to what we can afford to spend and despite that, many of us spend money on things we do not need or really can’t afford. If we identify the areas where we overspend, we can start living within our means and in the process become debt free.

Buy a local cell phone connection: Never ever use international roaming. Not even for receiving text messages. It’s always more economical to buy a local prepaid cell phone connection to use. International calls will cost you less and so will the local ones. If you’re a believer in using Internet through your phone, it will be cheaper too.

Eat at your hotel: Try to find a hotel deal with meals included in it. Usually hotel packages have one meal included in them. If you have one or more meals in your hotel package then use it. Passing up the hotel meal to eat at a restaurant is a waste of a good meal and money.

Avoid high end dining. The idea is to sightsee and explore a new country; not eat at expensive foreign restaurants. Eating fast foods or at local cafes will save you money.

Avoid souvenir shops: Souvenir shops are notorious for ripping people off. Don’t go to popular souvenir shops and avoid hotel souvenir shops like the plague. Instead, find shops off the beaten path. Bargain, haggle and depending on which country you’re in, start bargaining at half price.

Another point to ponder is to avoid buying souvenirs at all. Anything you buy – even if it’s just a scarf from India is a souvenir. It just isn’t a miniature of Taj Mahal but it’s a beautifully woven handmade scarf from India all the same.

Exchange currency before leaving: It’s always smart to exchange your currency into the currency of the country you’ll be visiting. If you wait to reach your destination to get your currency changed, it might cost you more in terms of exchange rate. Do your research into what the services charges will be if you use your credit/debit card abroad and how beneficial traveler’s checks will be.

Buy tickets early: When buying airfare for international travels, it’s often better to buy tickets at least 6 months in advance. The closer to your departure date you buy tickets, the more they will cost. Find out what the off seasons are for your airlines and then buy when the fares are low. If you’re traveling in winter then buy your tickets in the summer or earlier.

If you find the prices have dropped after you’ve purchased your ticket, contact your airline. Most airlines have a policy that returns the balance to you. Don’t forget to research different airlines before buying your ticket.

The benefits of taking a debt consolidation loan are obvious. Repayment of a single consolidated debt is very simple and less cumbersome. The arrangement results in savings from the reduced and reasonable rate of interest applicable on the loan. As the loan runs for a fixed period, one can repay it in a short period of time with every repayment reducing the principal.

Unlike other solutions, the credit rating of an individual is not permanently marred. A debt consolidation loan will give you the stability and breathing room you need for financial planning. It benefits the lenders as well because they are assured of repayment on the loans, albeit at a reduced rate of interest.

Borrowers with a bad credit history can get consolidation loans, too. A debt consolidation company will also usually attempt to improve your credit rating through a number of maneuvers.
Hence, debt consolidation loans encourage borrowers suffering from poor credit rating to get back on the right track.

However, availing a debt consolidation loan is not without its drawbacks and disadvantages. Using a debt consolidation loan reduces your rate of interest, but also increases the tenure of the loan. While the amount of repayment may be convenient, the longer tenure means you actually end up paying a higher amount in the end. From the long-term perspective, debt consolidation loan can be a very costly option if you do not select a reasonable pay-back period.

Further, the loans used to consolidate debts are secured on either property or other such assets. This means that defaulting on your payments could potentially result in the loss of your property.

You can often get the best loan by working out exactly what amount you needs to borrow.
Once you do this, you must shop around for the best deal. It is better not to get carried away looking for deals, but instead to avail the services of a reputed company that has comparatively good rates.

Constant Stress: Owing someone large amounts of money causes stress. Knowing you have to return it one day soon does not make for peaceful sleep especially when you can’t afford to pay back the debt if the creditor came looking for it today. Constant stress is also bad for health. Not only are you ruining your financial future by staying in debt, you’re also putting your health at risk,

No Savings: It doesn’t help your debt situation if you have no savings. Nor does it do any favors for your peace of mind. If you’re drowning in debt, it’s safe to assume you barely have any savings or else you would have paid it off by now. Imagine if, God forbid, some emergency came up that required you to pay large amount of money. What would you do then? You have no savings and you’re already drowning in debt. It’s the kind of scenario worst nightmares of made of; all the more reason to get out of debt and start saving for a rainy day.

You’re owned by creditors: When you owe someone money, whatever you make or save is not yours. Every penny is owned by your creditors. That in itself is enough to take the joy out of your work, leaving you unsatisfied with your life and job.

The Curse of Interest: You’re paying extra money in the form of interest. You may be paying off the minimum payment on your credit cards but that’s useless if you’re not paying any of the actual debt. Instead of paying off your debt, you’re wasting precious money you could be saving by paying interest. It is always important to pay more than the minimum payment so you get some of the debt out of the way.

Living outside Your Means: Debt isn’t all bad as long as you’re living within your means, can pay off your monthly installments and still have enough to save. However, usually people who have debt are living beyond their means. This is probably why their credit card bills have climbed high. While you’re in debt, the amount you need to pay it off could be money you were saving or meeting other needs you are ignoring.

The number one reason to get out of debt is to be able to live within your means again and to better plan your finances so you never fall in the debt trap.

Start off by jotting down a game plan. If you know what, when and how many ahead of time, the odds are much greater you will be able to bargain shop and get better deals on what you need.

Consider hosting a potluck, or alternating hosting of an ongoing or regular event such as a dinner club. Don’t be shy about asking people to BYOB. Alcohol gets expensive quickly and it is not tacky or rude to ask guests to contribute.

Instead of store bought flowers, use flowers or other greenery from your own yard as centerpieces.

Consider watering down a party. If you normally like to host dinner parties, consider going the route of just dessert and coffee to cut costs. Don’t forget the mantra of keeping things simple. Don’t get too fussy or offer too many choices. Often too much is too much. When you overdo it, it is stressful and taxing on you in addition to being expensive. Simple done well is more than enough.

Check out dollar stores for paper goods, cutlery and thematic decorative and party items. Also, look for these same items at end of season clearance sales at big box retailers or discount stores. Stock up on solids or patterns you can use year round.

Make your own invites or simply send invites via email or with an online service to save on mailing expenses. On the other hand, pick up the phone and call people for a personal touch that costs nothing but a few minutes of your time.