In the current economic crisis, managing finances has become more important than ever. People are going under all over the place. They re filing for bankruptcy and their houses are going into foreclosure. Companies are hemorrhaging jobs as their revenues continue to slide down the slippery slope towards plunging the company into oblivion. We compiled a list of tips we thought could help everyone manage their money better and get closer to being financially secure. There are many more methods available to help you out of bankruptcy court, so do your research to continue expanding your knowledge. Consult with a financial advisor to finish your path.

1. Understand your income.
A lot of people overspend out of a lack of awareness for how much money they have coming in. Common sense tells us that if you spend more than you make, you re going to go into something too many Americans are familiar with: debt. Knowing what you make down to a tenth of a cent isn t a foolproof method to stay out of debt though. People who know everything about their income can go into debt if they don t budget correctly, which takes us to our next tip.

2. Develop a budget and stick to it.
Some of us can succeed moneywise without even knowing the definition of the word budget. For the rest of us, we need a budget to stay on track. What a budget is exactly depends on the needs and lifestyle of the person whose making it. Understandably, someone who makes millions of dollars a year is going to have a more elaborate budget than a person who only earns $30,000. If a budget is something you need, make one and follow it as religiously as possible.

3. Avoid credit cards.
The idea of credit is intriguing to most people, but if you use it too frequently, you re going to get into debt sooner rather than later. Borrowing from credit agencies is different from asking those you love for money. Credit agencies charge interest rates, which compound what you owe until it s an amount you couldn t pay in your lifetime. If you have to use one, make sure it has a low enough interest rate to keep the balance from skyrocketing.

4. Stay away from loans.
Loans are the same as credit cards. They might seem like a good idea at first, but when you get the bill you gasp at how little money you re going to have left once you re done paying off the balance. The only productive loans are for cars and homes. Those have their dangers as well, so it s best to stay away as a general rule.

5. Purchase needs rather than wants
Retail giants are experts at convincing us we need a material possession we could go the rest of our lives without. A need is an item that s essential to someone staying alive, such as food, water and shelter. iPhones and iPods are cool, but you re not going to die if you leave the newest model sitting at the store. Limiting the amount of times you purchase wants is essential to financial success. A lot of people go under as a result of their massive amounts of retail debt. The solution to this problem is an easy one: don t go to the store. There you go. Problem solved.

Personal finance software isn t going to do the work for you, but it will serve as a helpful in the battle to keep yourself from slipping into financial oblivion. For these programs to work, you must be honest to yourself. They re only going to tell you what you enter into them. You can put any numbers into the program to get the result you want, but reality is always going to be looming over your shoulder. When it comes to money, you can t look at anything other than what s real.

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