2. Take responsibility for your finances. Your finances are your responsibility, not your significant other’s or your parents’ (or your adult children’s) or a financial advisor’s. For couples, it’s common for one person to handle the finances while the other plays dumb. Just because one person seems to have a better knack for finances, doesn’t mean the other person is off the hook. The person handling the finances could be just as clueless as you and could be digging you both deeper into debt. You won’t know if they are really paying the bills or taking out cash advances for a shopping spree. You won’t know unless you take control of your own finances.

3. Differentiate between a “need” vs. a “want“. Do you really need a fancy car, designer clothes, or the latest tech gadget? To get to this point, you’ll have to do some soul searching. If you are secure with who you are, then you won’t need “things” to make yourself feel better. Consumer debt is usually tied to underlying insecurities.

4. Create a realistic budget that includes a debt repayment plan. Track your expenses for necessities for a few months. Make sure you spend less than you make. If your budget still exceeds your income, either find creative ways to save money or earn more money. Be sure to include debt repayment in your budget.

5. Pay more than the minimum amount due. If you are only paying the minimum amount due, you are only paying the interest for your debt and none of the principal or amount you owe. It’s like running in a hamster wheel and getting nowhere. Pay off your debt as fast as you can, and you’ll start to see the light at the end of the tunnel.

It’s the first week at my new job and my first time hosting a carnival. This is a wonderful week.

Editor’s Picks

Mike Ross presents The Top 22 Money-Saving Firefox Extensions posted at The Budget Life Blog. This is a great list of websites that save you money by watching deals for you.

Bret presents Overcome Money Problems | Hope to Prosper posted at Hope to Prosper. Here is a step by step guide to overcoming money problems.

Paul @ FiscalGeek presents What’s a Good Credit Score? Should you Care? posted at FiscalGeek. Ever wonder how your FICO score is determined? This is a great article with a breakdown on what the numbers mean.

Arthur Pledger presents Making it Rain posted at World Domination with Arthur Pledger. This is a funny article on how to make it rain… with money!

Saving Money

Tom Tessin presents Finding a Car Rental Coupon posted at FGC Auto Blog. Save money on your car rental with a click of your mouse.

PT presents Earn Rewards Without a Credit Card: 2% Cash Back Using a Debit Card posted at PT Money. If you’re spending money, why not earn money back at the same time?

FIRE Finance presents Smart Refrigeration Lowers Electricity Bill posted at FIRE Finance. Little adjustments add up to big savings.

Money Beagle presents Keeping Our Dormant Frequent Flier Miles On Ice posted at Money Beagle. Here is an interesting way to use your airline miles.

Lower Your Taxes

Jeff Kosola presents How to Adjust Tax Withholdings posted at DeliverAwayDebt. If you haven’t already done your taxes, do it soon. Then adjust your withholdings accordingly.

Peter presents What Documentation Do I Need To Claim The First-Time Homebuyer Tax Credit posted at Bible Money Matters. Here’s another tax related article. Find out what documents you need to claim the first time homebuyer tax credit. Good stuff.

Debt

2 Cents presents The Lexicon of Debt or Is Debt Evil? posted at Balance Junkie. Is debt evil? I say yes, but check out this take on the meaning of debt.

Credit and Home Buying

Super Saver presents Our Approach to Buying a House posted at My Wealth Builder. What do you look for when buying a house?

Matthew Paulson presents Are Social Networking Sites Hurting Your Credit? This is an interesting take on why you should be careful what you post online.

Check out the previous editions of the Money Hacks Carnival.

*If you like this post, please Digg, Tweet, or share this story. Thanks!

This week’s Money Hacks Carnival includes some interesting articles, such as:

- How to File Taxes with Your 1099s

- TurboTax Online 2009 Overview

- 101 Ways To Improve Your Marriage Money Relationship

Check out the Money Hacks Carnival now.

FYI: I will be hosting next week’s Money Hacks Carnival!

“A short sale occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed.” Source: Elizabeth Weintraub, About.com

But if former homeowners don’t ask the lender to release them from all obligations, they could still owe the lender money! There may be a deficiency judgement if there’s a difference between what the homeowner owed on the mortgage and what the bank could sell the house for at an auction. The lenders can go after former homeowners with these deficiency judgements, even years after the house was sold.

Read more at CNN Money.

Open new credit cards. Getting a free T-shirt, umbrella, or a one time discount is a great perk for filling out a form! Aren’t they generous? Who cares if the free gift has the company logo on it? You enjoy being a walking advertisement for their product. Who cares if every credit card account that you open goes onto your credit report. Who cares if having a brand new credit card lowers your FICO score?

Don’t read the fine print. You don’t like to read long credit card or loan agreements. You only want to sign on the dotted line. You trust the loan officer or customer service person when they tell you that you are getting a good deal, even though they are being paid to say that. You only care that your minimum payment or interest is lower even if it’s only temporary.

Let your bills pile up. Don’t look at your bills. If you don’t know what you owe, they don’t exist, right?

Be clueless about the exact amount you owe and the interest rate of each debt. You make an educated guess and think you owe $5,000. But in reality, it’s really $8,000. You were off by $3,000. Oops! You could come up with a better strategy to pay off debt if you knew the principal amount and interest rate of each debt. But you don’t want to know because you don’t really want to admit that you are in debt. You like lying to yourself.

Keep using credit cards that carry a balance. Can’t pay off your credit cards every month? Keep using them because you’ll be slapped with finance charges every time you make a new purchase. Credit card companies will love you since they make so much money off of you.

Take out a loan. Want to get deeper into debt? Take out a high interest loan online. Why not trust Gary Coleman or Montel Williams to sell you the best loan in a radio or TV commercial? After all, you can trust them, can’t you? They have your best interest at heart since they are being paid a lot money to tell you that this is the best loan and it will solve all of your problems. The interest rates are through the roof right right now since a lot of people are borrowing money. You’ll pay off credit cards with this loan but incur a higher interest rate than all of your credit cards combined! You like being ripped off.

Don’t set a budget or cut expenses. Budgets are boring and restrictive. You’re a free spirit. You want to buy things as you please, even if you don’t need them. Who wants to know that they could get a better deal on their cell phone, cable/internet, or car insurance? You like wasting money.

Don’t have a debt repayment plan. You’re too lazy to create a debt repayment plan. You enjoy being in debt. Everything will work out eventually on its own, won’t it?

Pay only the minimum balance. You don’t want to give the credit cards any more of your money. That’s why you only pay the minimum balance. You’ll pay for your credit cards for a long time after you’ve made the purchases. But it’s okay because you’re only paying $50 a month.

Redeem credit card offers. Credit card companies love you! They keep sending you special offers to open more credit cards, since you have been such a great customer. Credit card companies tell you that you are a valued customer even though you haven’t paid anything off. They want you to have more money to spend. How thoughtful of them!

Don’t learn about personal finance. You don’t care to learn anything about how to manage your money or debt. It’s too hard to understand. But you’ve already broken this rule by reading this blog!

Rely on others to give you advice about your money. You don’t know much about how to invest your money. That’s why you hire a financial advisor to help you invest your money. Even though celebrities have lost a lot of money by trusting someone to invest their money, it’s ok. You would rather trust someone else to handle your money than trust yourself.

Give up. You figure that you’ll never pay off your debt. You are too depressed and overwhelmed. You think you are the only one who has ever been in debt. If you read personal finance blogs, you’ll know that almost every personal finance blogger has been in debt and have dug themselves out of it. Dave Ramsey is a great example. He had it all – a $250,000/yr salary, a nice sportscar, wife, and a house. When the real estate market changed, he owed $1.2 million. During that tough time, he lost everything except for his house. He had to sell his nice sportscar that he thought he deserved. His marriage was strained.

Know that you are not alone and you will get out of debt one day. Change your attitude and you will change your situation.

Included in Money Hacks Carnival #102.

Recently, my husband and I paid off a huge debt ,even though we are living on only one income. I’m still in shock that we paid this off so soon and without borrowing money. We did it and that means you can do it too!

When I got married 2 years ago, a friend asked me if we could live on one income, if we had to. This scenario would ring true if we started a family and one of us stayed home to raise the kids. Back then, I didn’t think it was possible.  We both had full time jobs but maybe we weren’t managing our money well. Or maybe all of our money went to our wedding, which was paid in full.

I lost my job last September. For a few months, we were forced to live on one income. Surprisingly, I was excited by this challenge. See how we downsized our budget and saved over $100 a month. It took 3 months for me to receive unemployment. Just as soon as unemployment checks started coming in, it ended, since I didn’t qualify for the extension.

All of my unemployment checks came all at once, in batches. It was a windfall of money which I am thankful for.

We could either save the money so we wouldn’t have to live on such a tight budget or pay off one of our debts. I knew that if we had extra money, we would end up spending it on something else. So we chose the latter, to pay off one of our biggest debts. This debt had such a high interest that if we only paid the monthly minimum payment of $250, we would be paying for it until 2014!

Also, I sold some of equipment from my former wedding video business. I sold a prized possession, my very first video camera. It was sold the next day on Facebook, of all places. I had a difficult time letting this camera go since I had built up a strong emotional attachment to it. But I kept reminding myself of the wonderful feeling I would have, once this debt was paid off.

By taking advantage of unemployment money and the sale of video equipment, we were able to pay off this massive debt, which we are extremely happy to get rid of. It feels like an enormous weight has been lifted off of our shoulders!

What can you do to pay off your debts faster? Do you have high-priced items that could sell well? Can you lower your budget more?

To many of us who are stuck in a mountain of debt, getting a giant check to pay off debt seems very appealing. Don’t do it! Internet loans, just like credit cards, are unsecured loans. That means you don’t have to put up any collateral, property that you promise to a lender, to secure repayment of a loan. Since loans without collateral are high risk to lenders, they charge you an extremely high interest rate to compensate for the risk they are taking.

The last time I checked, one Internet loan company was charging 139.34% APR on a $2600 loan! If you took out a loan like this, it would take you a very, very long time to pay it back. The interest alone, in one year is $3,622.84! You’ll  end up paying the $2600 that you originally borrowed, many times over.

This is a trap so don’t fall for it, no matter how desperate your circumstances are. My guess is that the interest rate is so high because in these tough times, people are borrowing more to make ends meet. And I’m betting that they are not looking at the interest rate or reading my blog.

It is better to stay with your credit cards. The interest rate for credit cards will never be as high as an internet loan. We may complain about credit card debt, but internet loans are far worse than credit cards.

Mint is an award winning, free budgeting tool that links all of your bank accounts and credit cards securely in one place. This gives you a complete picture of your finances, without you having to calculate anything. It’s almost like Quicken but far easier to use. Plus, Mint has great budgeting features, a modern designed site, helpful financial planning articles.

First, set up all of your logins for your bank accounts and credit cards. Don’t worry, your info is safe and secure since Mint uses the latest security features. Then set up your budget, setting aside the desired amount per category. Mint will automatically track your spending in each category. You will be able to see how much you are currently spending in each category and how much money is left in your budget.

There is also a transaction tab that looks like a checkbook register. Mint will automatically put your purchases and transactions into a category. You can also edit and correct these categories here.

When everything is set up, Mint puts your budget categories into a graph and a pie chart so you can visually see where your money is going. This really helps if you’re a visual person like me.

Basically, Mint.com makes it easy to budget even if you’re lazy. Simply log into Mint.com and it will pull the latest info from all of your accounts so you can see if you are on target or not.

Why is Mint free? Mint recommends financial products like credit cards or investment accounts according to your individual needs. When you sign up for those products they make money. You are not obligated to look at these products or sign up with them.

Sign up with Mint.com and learn about how to set up a budget.

I recently watched the movie “Confessions of a Shopaholic”, starring Isla Fisher of “Wedding Crashers”. “Confessions of a Shopaholic” is a romantic comedy about a shopaholic who maxes out her 12 credit cards, gets chased by an aggressive debt collector, and ironically lands a job as a writer for a personal finance magazine.

Although “Confessions of a Shopaholic” is a lighthearted comedy, it’s filled with valuable financial lessons.  Here are some of the lessons, without giving away the movie.

If you are over budget, either cut spending or make more money. If you are spending more than you make, you have two options – cut spending or make more money. Here are simple ways to cut spending. Cook at home more often, bring lunch to work, and cut down on monthly subscriptions (recurring bills such as cable or cell phone). If you’ve already cut down spending  and you still aren’t meeting your goal, then find a way to make more money. Sell stuff on eBay or Craigslist, working a part time job, do consulting, or freelancing.

If you have a spending addiction, get professional help. For some, overspending is an addictive behavior that requires professional help. The addiction may stem from deepseated, unresolved emotional pain. If you can’t control spending but instead are going deeper into debt, seek out a therapist. Check your health insurance to see if they cover therapy.

Don’t buy what you don’t need. Before buying something, ask yourself, “do I need this?” Most of the time you won’t.

Don’t run away from debt collectors. If you haven’t paid the minimum balance on credit cards or medical bills, the debt gets passed onto a debt collection agency. Once this happens, this debt will be noted on your credit report and will lower your credit score. Make it a priority to pay debt in collections first.

You can dig yourself out of debt. Doesn’t it seem like everyone wants a bailout these days? If you got yourself into debt, you can get yourself out of debt. Many people have paid off debt and so can you. Spend less than you make and use the extra money to pay off debts. When you pay off the debt you will feel a wonderful sense of accomplishment.

1. Know how much you make per month. First and foremost, you need to know how much money is coming in each month, whether it’s from your job, your spouse’s job, unemployment insurance, etc. Track the exact amount after taxes.

2. Set up a monthly budget. Spending more than you make is easy without a budget. You need to know exactly where your money is going. Track expenses for a month. Then set up your budget accordingly. Make sure your monthly budget does not exceed your monthly income. Don’t forget to set aside money to pay off debt.

3. Cut unnecessary spending. Cooking at home can instantly cut costs. Eating out is expensive and can add up quickly. On average, a couple can easily spend $20 – $30 on eating out at a restaurant. By cooking meals at home, you can bring down the cost to about $2 – $3 per person. What other ways can you reduce spending?

4. Track your debt. If you don’t know the exact amount of your debt, the interest rates on your credit cards and loans, the minimum payment amount, or payment due dates, then you cannot begin to make a change. Put all of your credit card and loan info onto an Excel spreadsheet. If you are low tech, use a piece of paper. Keep track of every loan and credit card, the current balance, the interest rate, minimum payment, and the monthly due dates. Refer to this sheet every week to keep track of payment due dates.

5. Stop using your credit cards. If you can’t pay the full amount on your credit cards every month, stop using your credit cards! If you carry a running balance on your credit card, any additional purchases will be assessed a finance charge right away. In fact, you will be charged a finance charge the same day you make a purchase, every time! You will not receive a 20 day grace period for any purchases (like you do when you pay in full by the due date every month). You don’t need to incur anymore debt than you already owe. Try to use cash for purchases. Also, don’t use the cash advance checks that come with your statement. Interest on cash advances can be 20% and up. Don’t dig yourself into deeper debt. Dig yourself out!

6. Pay off debt in collections first. If you have bills from a collections agency, then pay this debt off first. Debt in collections will lower your credit/FICO score. A low FICO score lowers your chances of being able to rent an apartment, get a cell phone, and qualify for a mortgage loan with a good interest rate. As a result, having a low credit score affects everything in your life. The good news is that you can improve your score by paying off any debt in collections.

7. Pay off the credit card or loan with highest interest and balance. Gather all of your credit card info – current balance, minimum payment, and interest rate, per card. If you’re bad at math, don’t worry, here is a wonderful free tool that will calculate how long it will take to pay off your debt. You can enter multiple credit cards and loans. Enter your balance, interest rate, and minimum payment. For the interest rate, for example, if it is 22.9% enter “22.9″. It will automatically give you a debt payment plan without you having to use any brain power. Click here for CNN Money’s debt calculator.

This is only a visual example. Click on the link above to use the debt calculator.

Enter the amount you can afford to pay towards your debt each month or your debt free deadline, in years and months, and it will figure out how much you need to pay every month to reach your goal. The debt calculator will apply more money to the credit card or loan with the highest interest and recommend that you pay the minimum payment on the remaining cards.

Seeing the whole picture of how long it will take to pay off all of your debt is liberating in a way. It takes away the fear of the unknown. Soon you will be debt free and that’s a wonderful feeling. Plan some sort of celebration when you pay off your debt!