If you are in a financial bind, cut expenses such as cable TV, drop you internet service and go to a dial up connection, cancel newspaper and magazine subscriptions, turn the thermostat down in the winter and up in the summer, only dine out on your birthday and anniversary, don’t buy books or periodicals, borrow them from the library instead, and so on. After cutting your expenses wherever you are able, look for a second job. Jobs parking car, stocking grocery shelves, working at car parts outlets, and sales positions at retail stores are just a few of the possibilities. There is nothing but honor in honest labor.

Don’t Take Out a Second Mortgage

If you end up heavily in debt by over extending yourself for an automobile and/or credit card purchases, the worst thing you can do is to take out a second mortgage on your home.

If you take out a 10 or 15 year home equity loan, that would mean you are going to be paying for your car or those credit card purchases for the next 10 or 15 years. If you had charged gasoline or dinner on that card, do you really think it would be wise to finance them over 10 or 15 years? See how ridiculous that would be.

Getting Out of Debt

If you have credit card and bank debt, there are two main methods that are recommended to retire that debt.

The first says to take the credit card with the lowest balance and pay if off as soon as possible. On all other cards and debt you’d make minimum payments until that lowest one is retired. Once it is paid off and closed, of the remaining cards, you’d take the one with the next lowest balance and repeat the process.

Or you may want to use the second method and that is to take the credit card with the highest interest rate and pay it off as soon as possible, while making minimum payments on all other debt. Next do the same for the one with the next highest interest rate and so on.

If you have multiple cards and loans, you may want to start with the first method and when you’ve closed out a credit card or two, you may want to switch to the second method. Do not cancel the cards, just cut them up and stop using them. Canceling them too quickly can adversely affect your credit rating. Instead, find ways to pay them off with one-off options like selling your old card collection or selling your old junk car.

Never Pay Interest for Anything but a Home Mortgage

Never pay interest for anything but a home mortgage. Take out only a 15 year or shorter time-frame mortgage and make extra payments whenever possible. Don’t buy a home until you have enough savings to replace the heating system, the roof, & all appliances. Those are must have things that, if they fail, you would have to borrow money to replace, at quite possibly a very high interest rate. You do not want to borrow to purchase these items.

If you never pay interest on credit cards, automobiles, major appliance purchases, trips and vacations, and the only interest you ever pay is on a 15 year home mortgage, the money you save over your working years, if invested, will allow you to retire comfortably.