- Pay off credit cards with high interest rates first — then get rid of them.
- Pay as much as you can on your smallest debts and pay at least the minimum on large ones — even modest accomplishments can be great motivation.
- If you buy a home, it should cost no more than 2 to 2.5 times your household income, and your mortgage should be no more than 80% of the home's value.
Learn more about debt management with these tips.
Live within your means:
- Write down every expense for a month to see where your money is going. You may be able to identify "extra money" to apply to savings.
- Make a realistic budget.
- If you have two incomes, try to cover all your expenses with one and use the other for savings.
- Before buying something, ask yourself if you really, really need it. Maybe wait a few weeks to decide.
This income and expenses worksheet from the FDIC can help you review your finances.
Saving for retirement, children's education, emergencies, or other expenses can give you peace of mind:
- Give savings the same importance as paying bills, and save something from each paycheck.
- See if your company has an automatic savings program. Contribute at least enough to qualify for matching funds, if offered.
- Many experts suggest putting at least 10% of your income into savings — and some recommend as much as 25%. Sound too hard? Start with one percent of your paycheck and increase as your salary grows.
- Save enough in an emergency fund to cover at least six months' worth of expenses — nine to twelve is even better. If you ever use it, rebuild it fast.
Need a few more pointers? Visit AmericaSaves.org for a list of 54 ways to save money.