Yet there is one type of protection you might be more prone to consider, and that is identity theft protection. Identity theft is a very real problem in today’s world, and it can have devastating consequences to those who fall victim to an identity thief’s tricks. So should you pay the credit card company for identity theft protection?

Look for Cards with Built-in Protection

Remember that the current economic situation is hurting credit card companies, and as a result they are starting to offer more and more incentives to good customers. If you have a good credit rating, you will probably be able to find a card with built in identity theft protection. In this case, you will not have to pay for it at all.

Know What Coverage Is Begin Offered

If you are considering identity theft protection, make sure you know what coverage is really being offered. Some credit card companies offer affordable identity theft protection, but they will not actually reimburse you for any stolen money. Instead, the coverage simply pays for the expenses you will take on as you try to get the mess straightened out after you discover the theft. Often, these problems are not discovered until thousands of dollars have been lost. You will still have lost that money, even with protection.

Also, dig into the service to find out what is monitored and how you will be contacted. If you are going to pay for credit protection, you need to know that you will be notified instantly if something goes wrong. If the fine print is confusing, call the customer service account to talk to someone so that you can learn exactly how the service is designed to work.

Consider Outside Insurance

Instead of paying for insurance with your credit card company, consider paying an outside company for identity theft insurance. Again, you need to read all that is covered in the policy, but this is a better way to protect your money. Not only will that particular credit card account be protected, but so will your other bank accounts and credit cards. This may end up being more cost effective than paying for protection on each account individually.

For most consumers, the amount of protection they will get from the credit card company for $10 or so a month is simply not worth the expense. There are many other ways to protect your financial situation from the actions of credit card thieves. Before you sign up for seemingly important credit card fraud protection, learn what is covered and what your other options are. You will likely find that paying for outside identity theft insurance is a far more affordable option.

Not Planning for Future Expenses
We all have bills that we pay annually or quarterly instead of monthly. If you do not plan for these in your monthly budget, they are going to make a huge dent in your finances when they roll around. For instance, your auto insurance bill may be several hundred dollars that you pay yearly. If you are not setting money aside each month, you will struggle to find enough cash to pay that bill when it does come.

Besides bills that you know should come, you also need to plan for the inevitable but yet unexpected expenses. Your home’s washing machine, for instance, is not going to live forever. Neither will your vehicle. Which brings us to our next common mistake:

Failing to Create an Emergency Fund
If you are living without an emergency fund, you are living on a ticking time bomb. You will have an emergency at some point. When it comes, you really should not consider it unexpected. You know it is coming; it’s just a matter of time.

Emergencies can be small, like the need to make a major repair on your car, or they could be large, like suddenly needing to travel to the other side of the country for a loved one’s funeral. Regardless, they are expenses that you simply must pay, and without an emergency fund they will require you to go into debt.

Giving Yourself No Freedom
Many families fail to stick to a budget because they have no freedom. If you want to purchase a candy bar at the convenience store, you can’t because there is no budgetary category for these types of purchases. If you do not have some freedom built into the budget, you will not stick with it, unless you are extremely disciplined.

One way to avoid this problem is to give yourself an allowance every month. For instance, give each adult in your family $30 to spend however they want on a monthly basis. The amount will vary depending on the size of your budget, but the idea is that the spender can use this money however he or she wants, even if it is spent on a totally frivolous purchase like a candy bar or a trip to the cinema. The money can also be saved for large personal purchases that do not fit into the family budget. This freedom will make sticking to the budget much, much easier for everyone in the family. You might even want to consider giving your children a small allowance to stop the constant begging and whining for treats when you are shopping.

Budgeting and living a financially sound lifestyle takes commitment, but if you fall into one of these three mistakes, you are going to struggle to stay committed. If you find yourself in one of these categories, start from scratch with your budget. You will quickly see how a few small changes can turn your budgetary blunder into a working plan.

Consider Refinancing, but Only if It Helps
Refinancing to a lower rate or a loan with a shorter term can help you pay off your home faster, but do not jump into refinancing without doing your homework first. Almost every lender is going to charge you fees for refinancing. Some common fees to watch for include:

Termination fees on your existing loan (which are particularly high for fixed rate loans)
Application fees
Stamp duty
Valuation
Legal fees

While you may not be able to get out of these fees, especially since some are required by law, you should shop around to find a lender with fair fees. Some will even pay the fees for you in order to get your business, so ask for this.

Once you know what the fees are, compare them to the potential monthly savings on the new loan. How many months will it take for you to earn back what you have spent to refinance? If you stand to come out ahead in a short time, or will have extra money you can use to pay down your loan faster, then refinance and start saving. Most financial experts feel that a savings of at least one percent on your interest rate is necessary for refinancing to be financially advantageous.

Make Extra Repayments
The easiest way to pay your mortgage off early is to make an extra repayment from time to time, but you need to do this the right way. In most 25-year mortgages, the principal and interest of the payment is amortized. This means that at the beginning of your loan, your payment will have more money going towards interest than principal. During the first five to eight years of your mortgage, each payment puts little towards the actual balance of the loan.

If you can make a few extra payments, which go completely towards the principal, you will be able to pay the loan off much faster. This strategy is more effective at the beginning of your mortgage, because you will be cutting the amount of interest you pay over the lifetime of your loan substantially. Just a few extra payments in the first several years of your loan can actually take a year or two off of the total repayment period.

Watch for Fees
Paying your loan off early is a great goal. However, you might be penalized for this. Before you start making extra payments or shopping for a refinance package, find out if your loan will charge you if you pay it off early. Also, find out if you are allowed to make extra payments, as you may be limited to the number you can make.

Take Advantage of Credit Card Offerings
Does your credit card have a rewards program? Have you earned cash back that you haven’t cashed in? While this is not the time to accumulate huge balances on your credit cards, you can save a little bit by using your cards moderately and then taking advantage of the discounts, rewards, and cash back percentages that you earn. Call your credit card company to learn the rewards you have waiting. They may not make them obvious to you, so be proactive.

Start Using Cloth Napkins
Do you use napkins frequently at home meals? Why not switch to cloth? You can wash them when the meal is done, and cut down on your household goods budget. Not only that, but you will be helping to keep Australia beautiful at the same time.

Save on Petrol
There are many ways you can save on fuel for your vehicle. First, consider starting a carpool if you have co-workers or schoolmates who live near you. You can all take turns driving and cut back tremendously on your gasoline bill.

Second, make sure your car has all of its maintenance done, which will increase not only its life expectancy, but also its fuel efficiency. For example, if you keep your tires at the proper pressure, you will get better gas mileage.

Finally, drive more fuel efficiently. Avoid extremely fast starts and stops to help your vehicle get more miles out of each gallon of gas. Also, try to do as many errands as possible in the same trip, so that you have fewer trips to take.

Do Your Own Repairs
This is the time to become a handyman (or woman). If something breaks in your home, consult the owner’s manual before calling the repair person. You might be able to fix it yourself, and you will save hundreds of dollars. Of course, do not attempt to repair things that could be dangerous, like electrical items, if you do not have the proper training, but most appliances, some things on your car and even some plumbing tasks can be fixed by the average homeowner without the need to call in the experts.

Learn to Stock Up
When your favourite store has a sale on something your family eats regularly, stock up. Canned goods can go in a cabinet, and meat can go in the freezer, and by stocking up when these items go on sale you will save a lot on your yearly grocery budget. You can even buy meat that is getting close to its expiration date and freeze it. This meat is often deeply discounted, yet is perfectly good if you freeze it right away.

By combining tips like these, you will save quite a bit of money over the year. It may not make much of a difference in your weekly or monthly budget, but if you stick to these tips, you will end up with more money in your pocket at the end of the year.

Problems with Payments
You may think you are doing fine with your credit cards because you are dutifully making the minimum payment each and every month. This is a great goal, but if all you make is the minimum payment, you will always have credit card debt. The minimum payment does little to pay down your debt, because it barely covers the finance charge you added too the debt that month, particularly if you have a high balance or interest rate. If you cannot afford to at least double your minimum payment, then you are in trouble.

Reliance on Credit Cards
Credit cards should be used only as a tool to help your financial situation, not as a tool to get you things that you want or need but otherwise cannot afford. If you regularly turn to credit cards to buy things for your family, or if you cannot imagine going a month without using your credit cards, then you are relying too heavily on them. You are headed toward credit card debt problems.

Too Many Cards
When you get an offer for a great new card, do you instantly sign up? Do you have more than two or three cards in your wallet that you regularly use or that have balances on them? If you do, you have too many cards, and this can be sign of a debt problem. You may be addicted to spending with your credit cards.

Your Debt Is a Secret
Do you do everything you can to keep the credit card balances you have a secret? Does your spouse or significant other know how serious the problem is? Do you hide statements so that he or she will not find out? If you have something to be ashamed of when it comes to your credit card debt load, you probably have a problem.

Credit Card Balances
Are your credit cards maxed out? This can be a sign of a debt problem. It also has an affect on your credit rating. Do what you can as fast as possible to lower those balances and stop adding to them.

What to Do if You Have a Problem
If you decide that you have a credit card debt problem, start making changes. You need to stop spending and start paying down those debts. If this seems like an impossible task to tackle on your own, consider looking for debt counselling services. There are several free government sponsored options, such as the Rural Financial Counselling Service offered in rural areas by the Department of Agriculture. If you live in the city, look for government or charitable financial counselling services, and get the help you need today.

Write Down Your Goals
Are you saving for a big vacation, payment for big credit card debts, a university education for the kids, or to pay cash for a new vehicle? Write down your goals and the length of time you are giving yourself to reach them. Then, track your progress. As you see yourself coming closer and closer to your goals, you will be more motivated to stay within your budget.

Consider Your Obstacles
Everyone faces financial obstacles. Perhaps your income is much lower then you feel it should be. Maybe you cannot start saving for your goals until you pay off a substantial debt. Do not let these hurdles stop you. Instead, acknowledge them and work them into your budgeting plan.

This requires asking yourself some hard questions. You need to evaluate what is holding you back from reaching your financial goals. You cannot overcome these obstacles until you know what they are.

Plan to Overcome Your Obstacles
Make a written plan for overcoming the obstacles you have listed. Perhaps it is debt that is holding you back. Write down your plan for the way you will repay your debt load. Which credit card will you repay first? When you repay it, plan to roll that amount onto the next credit card, and continue this process until they are all paid. If your obstacle is lack of sufficient funds, write down plans for either cutting back or increasing your income. By having a written plan, you are more likely to see hope for overcoming your obstacles.

Look at the Benefits
How does budgeting benefit you and your family? Does it provide less financial stress? Does it give you more freedom on how to spend your money, since you know there is money available to spend on that particular item? While your individual benefits are going to be unique to your situation, here are some common ways people benefit from going on a budget:

• Freedom in knowing how much money is available to spend
• Ability to pay off debt faster
• Learning to appreciate the items you have instead of always buying new ones
• Understanding the value of each dollar that is brought into the family
• Ability to find money to put into savings

Budgeting is a challenge, and it takes discipline to stick to a budget, but the alternative is simply unthinkable. If you do not know where your income is being spent, you will regularly waste money that could be used to fund your children’s education, pay for your retirement or send your family on that vacation you so desperately need. Use these tips to keep yourself motivated, but whatever you do, create a budget and start using it today!

Find Alternative Accommodations
The biggest chunk of money you will spend while on holiday is on your accommodations. Hotels are expensive, no matter what you do. You can save money by shopping online or travelling in the slow season, but a hotel is still expensive.

Instead, try to think of an alternative accommodation option. If you own a tent or trailer, travel somewhere that you can camp. This is always more affordable than staying in a hotel. Consider visiting relatives this year or renting the home of a friend or family member in another part of the country while he is on holiday for a more affordable rate. Of course, do not become a pest if you do this, but if you have someone who will willingly welcome your family, take advantage of the offer this year. You can even stay home and vacation in your local area, exploring the things you have never seen before because you have been too busy with work.

Save on Food
Try not to eat at restaurants while on holiday if at all possible. If your accommodations have kitchen facilities, eat in. Bring your food from home as well. If you cannot get accommodations with a kitchen, try to get a refrigerator in your room. Then you can make a cold meal to take for lunch, saving you the cost of at least one meal a day. If your family needs regular snacks, bring these with you. You can also bring breakfast items, like pastries or oatmeal, to save some money by skipping a restaurant breakfast.

Take a Day Off
If you are travelling somewhere that has much to see and do, schedule some “days off” into your holiday. Play games in the hotel or at the campground and simply enjoy each other’s company. Go swimming in the hotel pool, roast something over the campfire and remember what you appreciate about those in your family. You will save money, because you will not be spending it on the attractions of your destination. You will also be getting some rest, which is part of the purpose of a holiday.

Limit Your Travel Expenses
If staying home is not appealing, you can still lower the cost of your holiday by sticking closer to home. You do not need to fly to an exotic destination to enjoy a fun holiday, nor do you need to drive too far from home. By limiting the length of your travel, you will save money on gas or airline tickets.

Remember, the goal of going on holiday is to spend quality time with your family away from your normal stresses and commitments, not necessarily to see the latest and greatest tourist attraction or the most popular holiday spot. By planning carefully, you can still enjoy your holiday without spending a fortune.

Start Saving Anything
Many of us live on a bare bones budget, with little extra to tuck away. Even if all you can do is put $50 a month in an account, start doing it. The money will eventually add up, and you will feel confident knowing you have some cushion should the unexpected happen.

The only way to make this work is to treat payments to your emergency fund the same as any other bill, and to give it top priority. Pay yourself first and your other bills second. Then, put the money in a fund that is not quite so easy to access. You want to be able to access it if you have a true emergency, but you do not need to be able to access it if you use up all of your grocery money eating out that month.

Make It Automatic
One of the easiest ways to ensure that you are saving your money is to make saving automatic. Try to find a bank account that lets you make automatic deposits. Many of the online banks will automatically withdraw funds from your primary bank account to put into the savings account. It’s much harder to save money once it hits your bank account, so make the savings payment automatic.

Start with a Budget
You may not be able to see a way to stash money in an emergency fund. If you are in this situation, start with a budget. Take a month or two to monitor where your money is going. If you track your expenditures for a period of time, you will quickly see where you are wasting money that could be used towards your emergency fund. If you are like the average consumer, you have little idea of where your money is going.

Cut the Extras
You do not have to live like a miser, but if you can cut some of your extra expenditures and put money in savings, your future will look much brighter. Make your own coffee at home instead of stopping at the coffee shop. Pack a picnic for a family outing rather than stopping at the fast food restaurant. Your budget will show you where some of those extras are, so start working on it now.

Remember, if you sacrifice a little today to build your emergency fund, you will be less dependent on your credit cards, and will instead be able to use them to your advantage if you want to. When a true emergency hits, you will have the cash to deal with it.

Be Honest
Telling your children that you lost your job is not going to be easy, but you need to be honest. Your kids are going to figure it out anyways, when you stop leaving for work in the morning. If you and your spouse are having whispered conversations outside of their earshot, they are going to be even more worried. They will know that something is wrong, and they may think they have caused a problem since you are not telling them. Be honest, but tactful.

Be Age Appropriate
If your kids are not yet in school, they have no real concept of money and how money works. They think you simply go to the bank and get the money you need. You will need to start the conversation with a discussion about work and how it brings money to the family.

If your children are older, they understand this context. However, this means they will probably worry. Some older children may even assume that because you are going to lose your job, they are going to be homeless. Reassuring them is essential to their psychological well being.

Be Clear About the Future
Make sure your kids know that you are going to be fine. Let them know about your savings accounts, and tell them that there will be money for food and shelter. However, make sure they understand that you are going to have to cut back on some of the extras. You might not have money to buy them new toys or the latest fashions, but if you work together as a family you will be fine.

When you start the job hunt, let the kids in on what you are doing. They need to see mom or dad out there trying to find work. This will teach them to value the jobs they have in the future.

If your kids seem to be worrying, make sure you let them know that you and your spouse are going to think through everything. Tell them it is not their responsibility to figure out what to do next. You need to help them feel secure that their parents have a plan.

If you do not have a plan, don’t let your kids know this. They need security in this insecure time. However, make sure they do understand that times will be tough for a while. Children sense fake smiles and positive attitudes, so don’t try too hard to put on a facade for them.

You can let them know that you are a little worried, as long as you do so in a positive manner. Your attitude will rub off on your children. If you need to have a long cry, do it after they are in bed. Remember, your job is to create a stable, loving and supported environment for your kids, even in unstable economic times.

A credit card is not the evil entity that many have pictured it to be. You can use credit cards wisely and benefit substantially from them, but you will have to start thinking before you buy!

Pay Your Bill
The first way to use your credit card more wisely is to start paying your bill, in full, every month. This allows you to benefit from the freedom of charging your purchases as well as any benefits programs offered by your credit card company, without paying the high interest fees common with modern credit cards.

Remember, you are paying at least 14 percent in interest for most credit cards. When you do not pay your bill in full, you are, in effect, taking out a high-interest loan for the purchase. Stop and think about what you bought on your card the last time you used it. Was it socks? A meal at your favourite fast food restaurant? A cup of coffee? Would you really ask your bank to give you a high interest loan for that purchase? By using your credit card and not paying the bill off, you are doing just that.

Set Limits
How many credit cards do you own? If you are struggling with reigning in your spending, limit yourself to one credit card. While you are at it, lower the credit limit slightly so that it is something you can realistically manage, should you have an emergency that forces you to use the entire limit. If you do not have a dozen cards ready for you to use, each with its own due date, penalty system and credit limit, you will have a much easier time staying on top of your debt load and not overspending. Avoid carrying it in your wallet, where you will end up using it for spur-of-the-moment purchases.

Take Advantage of Rewards
One of the main arguments for keeping a credit card available to you is the rewards programs offered by most major credit card programs. As you are choosing the card you are going to use or the one out of your wallet you are going to keep, choose one that has a good rewards program. Then, keep track of the credits you have earned, and be ready to cash them in.

Gift cards used as gifts for the holidays, free airline travel and even a credit on your bill are all possibilities with credit card rewards programs. If you are charging your purchases, but paying off those charges every month, you are earning credit cards rewards points. However, this is a wasted benefit if you do not take advantage of the points you have earned. Also, do not pay fees in order to get a great rewards program, unless it is truly a program you will not find elsewhere for free.