You should begin by making lists of your outgoings and income. Make sure you allow for all of your outgoings. It can be easy to overlook less frequent payments or ones that seem small individually but which can add up to a substantial amount.

Once you know how much you are spending and earning, you should make sure that the amounts balance. If you are spending too much, then you need to find some way of cutting your costs or of earning some extra money. You may want to change your shopping habits by buying less or shopping in more affordable stores, get a car that uses up less gas or take on some overtime at work, for example. If you find it difficult to keep track of what you are spending when you use a debit card then make sure you use cash instead.

Some of your expenses will vary from month to month, and you should set a limit on how much you will spend on these. If you spend less than this limit, you can add the remainder to your savings account.

Having some savings set aside will be a huge help if you are trying to stay out of debt. Rather than relying on borrowed money to cover bills that arrive before payday or to help yourself out of an emergency, you can use your own money. You should invest your money in a savings account in order to earn a good rate of interest. If you build up a large amount of savings, then you can look at some riskier, but potentially higher earning investments, but remember that you should always have a secure, easily accessible lump sum saved up which you can use when you need it.

If you are going to stay out of debt, you will need to make sure that you have the right attitude towards money. You must not be tempted to buy what you cannot afford. You must not be tricked by offers of credit cards, store cards and other borrowed money that will end up costing you a lot more than you may expect. You should concentrate on saving rather than spending your money. The only safe way to borrow is to borrow from your own savings. When you need some extra money, take it out of your savings, and then make sure that you pay it back and build up your savings again.

It does not have to be that way at all. There are options available that you can consider that will not entail giving up or falling prey to scoundrels in suits.

Today, we live in an economy that thrives on credit. You can buy anything on credit now. The problem arises when we are unprepared to face the consequences of impulsive purchases or loans.

So, assuming you are in a credit slump. Why not consider bartering? This is a trade transaction as old as time. You have something that someone else may want, and vice versa. Another term would be swapping. There are no hard and fast rules in bartering except being able to deal fairly. One way to barter would be direct exchange. Another option would be trading with cash if your item costs more than the item of the other guy.

Bartering is a trade negotiation, so you have to be willing to adjust your selling price if you want to close the deal. This means that to protect your interest, research on what the going rate is for your item, when it is brand new and as a used item. Next, make sure your item is in fairly good condition, or if it is not, make sure the buyer knows what he is getting and indicate that you are disposing of your item on an “as is” basis.

Marketing your items for barter can be done in print ads, flyers, or on the Internet. If you plan to trade over the Internet, be very careful who you are dealing with. There are plenty of unscrupulous people out there and it is very hard to go after them in case of a botched transaction.

Suppose you have searched your house and have found nothing you want to let go of, why not market your services? Can you write or type? Do you enjoy chatting? If you have a reliable Internet service, you could search for part time jobs.

On the other hand, if you do not have access to Internet 24/7, consider your hobbies or interests. You could be handy with tools, knowledgeable about cars or machines, or excellent in baking.

There are many choices, if you look hard enough. At the same time, you should work on decreasing your expenses; negotiate with your creditors for lower interest rates and lower monthly payments.

At this point, it is important to get the use of your credit cards under control to avoid going any deeper into debt. A big indicator that you are close to bankruptcy is that your credit cards are maxed out. People will find that using credit cards is a debt trap as it is very difficult to pay off your bill plus the high rates of interest. A good way to keep yourself in check is to never spend more than 60% of your total maximum limit. Your credit card may also break down how you’re spending your money. Look at these statements to determine where you can cut back spending to maximize the use of your dollar.

A big error that people often make is taking out a line of home equity and spending that money on frivolous items. While you are allowed to borrow money against the value of your house, this should only be done in an emergency situation and not to pay off your shopping bills. Losing your job means losing all of the benefits that come with it, including insurance that you and your family will surely need. In that situation a home equity line would be appropriate, but barring an emergency like that, avoid taking out a loan against your house.

Because of the recent downturn of the economy, it may be very difficult to find a new job that supports your family’s usual standard of living and provides the way your last job may have. Unemployment is one of the main precursors to bankruptcy, so be sure to save a bit of money for a time when it will help you avoid a very difficult decision. No matter how secure your job may be, in this economy, nobody’s job is 100% guaranteed and everyone would be wise to make preparations.

Avoid allowing anybody to convince you to co-sign their loan. By co-signing, you agreed to be held accountable in case the other person defaults, and it in no way benefits you to be on the hook for a loan that isn’t yours. This is another leading cause of bankruptcy.

To re-iterate, to avoid going bankrupt, make sure to keep tabs on where your money goes, and avoid using credit cards that will ensnare you in debt. Always save a little bit of money from your paycheck in case of emergencies and keep the value of your home intact by avoiding the temptation of a home-equity loan.

Cash Advances
Although experts advocate against cash advances, sometimes it may seem like the only alternative to a bad situation. These types of loans are based upon your paycheck from your employer and can grant you up to fifty percent of your upcoming paycheck. Beware, if these loans are not paid on time than high interest rates will be applied to the loan and aggressive collection techniques may be taken against you.

Most companies require a statement of your last paycheck, a post dated check for the amount of the loan as well as a print out of the balance from your bank account that you use most.

Personal Loans
Sometimes the only option may be to borrow money from a friend or family member for a short period of time. Be sure to explain the need for the funds and create a repayment schedule that you can abide by. This is a great time to earn trust from a friend or family member by ensuring the total is paid back in full.

Credit Cards
Although your credit cards may be close to the limit, you could be eligible for a limit increase. Call the credit card company to request a limit increase, often increases are granted up to five hundred dollars. Ensure this amount is paid in full within the grace period; you don’t want to be drowning in over-limit fees in the future.

Liquidate Your Assets
Do you have any assets which you could liquidate to supplement your income through this time of financial distress? Assets such as investments, stocks, bonds and even household items such as an extra vehicle can be used to provide the capitol needed to get through an emergency.

Short Term Loans
Short term loans are available from cash stores, pawn stores and even the internet! If you have good credit history and some type of asset that can be used as collateral such as a vehicle, land title or home than you can obtain this loan in as little as twenty four hours!

The internet can be used as a valuable tool when obtaining a loan, as many companies have turned to e-lending. You can apply, be approved and complete deposit information – all on the internet!

A Payday Loan is one way to get your hands on money that is due to you anyway. It seems like asking for a cash advance, right? Not really. For one, you are charged high interest, so your pay will actually decrease because of the loan.

Another downside to a loan like this would be the entity offering such services. Realize that when you apply for such a loan, you will be required to submit personal and financial information about yourself. This opens you up to a lot of problems if the company you are dealing with is not secure.

I would suggest if you are intent on getting a Payday Loan, try to get it from your company or why not ask for a cash advance if the amount you need is within your pay range? This way, you do not get charged with any interest.

If the amount you need is bigger than your pay, why not borrow from a reliable friend or family member? You could also check out what the government can offer by way of low interest loans.

Let us say you have a credit problem, which is why you are considering the Payday Loan. The last thing you need is another loan to deal with. It will only compound your problem. Simply put, you cannot apply for a loan to pay for an existing loan, especially if the interest rate is the same. If the interest being offered is half that of your existing loan with better payment terms, then go ahead and pay off your existing high interest loan.

There are other options you can consider, like cutting back on unnecessary expenses. Eat at home instead of going out to restaurants. Check your electric consumption and see where you can save. If you have appliances that you habitually put on standby mode the whole day, you should realize that even if it seems off, it is not. An appliance on standby mode still consumes power.

What about a garage sale? Go through your closet and even your entire house. See what you have accumulated over the years and sort out those you do not need.

There are ways around a credit repair process that does not entail new loans. It might need more creativity, but it will be worth the effort.

This is okay. There is nothing wrong with this as long as you pay. The sooner you pay, the better your credit will be.

Suppose you have racked up a lot of bills, and you cannot keep up with the monthly payments. What do you do? Your first reaction would be to get desperate. People calling you up, knocking on your doors, disconnection notices – all these can drive anyone to panic. It is a normal reaction but it is what you do after the panic attack that matters.

Work the problem. Get help if you cannot figure out what to do. Know that it will take time and control to fix it. But it has to be fixed properly. In the business world, your credit defines who you are. People will be willing to take risks with you only if you have good credit.

For those just starting to build their credit, initially, you might have to get a supplementary card under a trusted family member or friend. You can even start your savings or current account to establish your credibility. Once you have done that, you can apply for credit under your own name. You can buy a car, house, or minor appliances.

If you are young and in a relatively average income job, start small. Start slow. Start with gadgets, club memberships, or the like. Stay away from the large purchases until you are financially stable. Build a safety net in case of emergencies.

When the monthly bills start coming in, pay on or before the due dates. Do not delay in paying for this will just cost you more in late fees.

Suppose you bought a cell phone and you actually have the funds to pay for it, yet you decide to use your card. I would suggest that within a few days of your purchase and before the cut off date, pay your credit company. This way, you do not get charged interest.

Surely you have heard of a lot of people going under, filing for bankruptcy, or losing their homes. Listen to their stories, read about their experiences. Keep in mind that something like that could happen to you.

So, instead of buying a sports car that you know is not within your budget, settle for a sedan or that cute, easy to drive VW bug. The big stuff can come later, and it will, if you are careful with your credit.

1. Assess your debt

Know how much you owe, what interest you’re paying and whom you owe. Unless you start assessing how much your total debts are, you will not be able to have a proper debt relief management plan.

2. Take control of your optional spending

Keep a daily record of your outgoings for a week. They will usually reflect your spending patterns. Upon scrutiny, you will find there are a few things you spend money on that you don’t really need. The money you save can be used towards paying off your debts.

3. Take control of your fixed costs

Switching providers for your telephone, cell phone, cable, internet, gas and electricity services and any other utilities could save you money. Check around for competitive rates.

4. Research and increase your available resources.

Examine ways to increase your income, including finding additional work or selling non-essential assets.

5. Consolidation

A low rate consolidation loan can reduce the amount that you have to pay out each month, as the repayment on your consolidation loan will be far less than the combined repayments on your existing debts.

6. Make an arrangement with creditors

Contact your creditors in writing, explaining your situation and propose to them to lower payments on your debts. Your creditors will usually agree if you have conducted your account reasonably. So while you wait for their response, continue in the same manner, paying your bills on time.

7. Avoid short-term solutions

Payday loans and car-title loans may seem like a good solution when you need them but if you can’t keep up payments you could find yourself in a worse off position than when you started.

8. Don’t ignore your bills and letters

Putting away your bills and letters to deal with them later can result in you owing even more as penalties and interests can be charged additionally. Your creditors are likely to get tougher on you when you ignore your bills – if you can’t pay them at that particular time, pick up the phone and let them know.

9. Pay more than the minimum

If you have credit card debts, make sure you’re paying more than the minimum. This will reduce the interest you pay monthly and will help you pay off the debt quicker. Better still, pay in full. If you really must have credit cards around, source for the best credit cards or credit card deals you can find.

10. Learn from your mistakes.

When you have taken corrective measures, don’t feel too comfortable as you may fall back to your previous situation. If you ever start to feel that your debt is more manageable, this would be a good time to start saving whatever little you have left after paying your bills. Having some savings will stop you from borrowing again in case of an emergency. Manage your debts wisely.

The Malaysian Government announced an increase in petrol and diesel prices as well as electricity tariff yesterday at 40.6% (from RM1.92 per litre to RM2.70), 63.3%, (from RM1.58 per litre to RM2.58) and 20% for homes (above 400 kw) and 26% for business users respectively. The increase created shockwaves throughout the country and many petrol stations saw hundreds, if not thousands, of vehicles queuing up to have their tanks filled prior to the price increase at midnight. I was one of the motorists and I had no choice as both my cars incidentally were at the "empty" level yesterday evening. Still, the decision to queue up for not less than 30 minutes per car saved me at least RM45 in total, which can buy us 2 1/2 packs of milk powder or 1 1/2 packs of diapers for our 2 daughters.

This post is not about the merits of the price increase or fault finding. Prices of everyday goods have increased globally and governments around the world are cracking their heads trying to find a balance between income, subsidies and expenditure. It’s a matter of which government is more prudent financially. This post is about what you can do to cope with the rising inflation , where many are finding it hard to make ends meet. In many ways, these are also some of the methods that I employ.

Income

1. Be thankful with the job that you have. At least you have an income. Continue to find ways to increase your worth as an employee so that if and when appraisal comes about, your chances of getting an increment are higher.

2. Consider part-time income . How about blogging or making money online? I have a couple of sites and they supplement my income. All I need to do is to invest 1 to 3 hours a day. Do remember, however, that there are many things to learn about making money online and money does not drop down from the sky.

3. Create opportunities or look out for opportunities of income. Do not fall into dubious scams or get-rick-quick schemes. Anything that promises quick money must be treated as a scam until proven innocent .

4. Save money . That goes without saying. Any amount, however small, will eventually form into a bigger amount as months go by. Make it a habit to put aside a portion of your income into savings.

5. Invest . When faced with an economic recession, cash is king. Keep your cash in safe investment instruments such as fixed deposits or bonds. If you have surplus cash, buy fundamentally-sound shares and stocks when they are at a low price and keep them aside until the economy improves. Trading on margins are risky unless you know what you are doing.

6. Spread out your investments to decrease your risk. Choose between bank deposits, bonds, unit trusts, shares and stocks, property, insurance and other forms of investments.

7. Maximise your tax rebates and deductions . Find out and understand about the various tax breaks given by the government and utilise them smartly.

Expenditure

1. Cut down on unnecessary expenses . Before you purchase something, consider whether it is a necessity or a want. The latter is usually a luxury. For example, buy a basic phone instead of buying the latest phone which costs you twice the amount. Whilst you need to make phone calls, you don’t need to take photos that often or listen to music.

2. Consider doing housework without the help of a foreign maid . Many families are able to do so and with a little bit of effort, you would be able to adapt to life without a foreign maid. The cost of hiring and maintaining a foreign maid is high and sometimes, you are not aware of the hidden costs such as wasteful use of detergents, water, electricity etc.

3. Use public transport if it does not hinder your work performance and the costs of using public transportation is cheaper than maintaining a vehicle.

4. Use a vehicle which is more fuel efficient or which the government gives incentives. Find out which vehicles score high on fuel efficiency and low maintenance. It does not matter what other’s think about the type of vehicle you are travelling on. At the end of the day, they are not giving you anything to make your life better.

5. If you are driving, plan your trips to reduce unnecessary travelling time and mileage. This saves fuel and time.

6. If possible, travel during off-peak hours where chances of a traffic jam are lower. When you are stuck in a traffic jam, you are burning fuel unnecessarily. For those of you living in areas where peak-hour surcharges are applicable, try to travel during off-peak hours.

7. Experiment between travelling on a highway with toll payable as against an alternative toll-free route to see whether you actually save on fuel vis a vis the toll payable. Sometimes, the amount of toll payable might be cheaper than the loss in fuel due to an alternative route which is congested with traffic or requires more acceleration and deceleration.

8. Drive sensibly . Hitting the accelarator hard consumes more fuel compared to gradual acceleration. Keep at a constant speed of 90km/h which many car experts say is the optimum speed especially where fuel consumption is concerned.

9. Keep tyre pressure checked and maintain your vehicle regularly . A healthy and happy vehicle consumes less fuel and has a longer lifespan.

10. Switch off the lights in vacant rooms . Use energy saver lighting where possible. When buying electrical products, choose one which is energy-efficient. Use a fan rather than an air-conditioner.

11. Don’t waste water . Use a front loading washing machine rather than a top loading as the former uses less water (using less water does not necessarily mean less clean clothes). Use showers rather than long baths or buckets and ladles when washing up.

12. Treat eating out as a luxury or reduce dining at fancy restaurants . You need to eat but there is no need to eat in fancy restaurants which charge exorbitantly. Why pay RM9.90 for a plate of fried rice in an air-conditioned restaurant when you can have the same (and possibly more delicious) at a less fancy eatery for RM5.00? Why drink an expensive cup of coffee at RM8.00 when you can have one for RM2.00 or less in a coffeeshop? It’s still food and drink which you need but don’t require any luxury to it.

13. Ditto 12 – don’t buy overpriced food when you can have something close for a fraction of the price. Eating from a loaf of wholewheat High 5 or Gardenia bread costing RM3.00 is cheaper than a wholewheat loaf from a boutique bakery. Little savings count. Buy a tub of ice cream for RM5.99 compared to an imported smaller tub which costs RM20.00 or more. It will still melt in your mouth and give you a short while of pleasure.

14. Recycle . Sell your unwanted stuffs. Even old newspapers and empty tin cans fetch a price. Hold a jumble sale. Not only will you earn some money, you are doing yourself a favour cleaning up your home / office.

15. Don’t be embarassed using hand-me-downs . For those with young infants, hand-me-downs (eg. clothing, baby strollers, beds, toys, etc.) help to save a lot of money. Afterall, babies and toddlers grow up fast and it would be wasteful to buy everything new.

16. In my opinion, there is negligible difference between a more well-known brand of infant formula compared to a lesser known brand though there is a big difference in pricing. Compared the ingredients of an expensive brand and a cheaper brand. Bear in mind that the difference is usually in fractions of miligrammes. Do you seriously think it would make such a big impact on your child’s intelligence and what-nots if you don’t buy the expensive infant formula?

17. Know your price before you purchase . Compare the prices of the essentials between different shopping outlets. Scan the papers for discounts and sales of the essential items you buy. Don’t purchase hastily.

Okay…that’s all for now. It’s way past lunch time and I need to find some grub. In the meantime, why don’t you share some anti-inflation tips here with other readers by leaving a comment? I would be glad if you do.

Updated :

1) Most people are depressed and angry enough with the rising inflation and this post is not a rant about what could or should be done. So, in the interest of readers who want to know how to cope with rising inflation, I will have to delete comments which do not contribute to this post by way of anti-inflation tips .

2) If you have written similar tips on your blog, leave the url to your post in the comment section and I will place it here on this post.

Other Tips

• How to Save Petrol by The Obnoxious 5xMom
• Frugal Living Guide for Malaysians (with a touch of humour) by ShadowFox
• What Can We Do Without Petrol by Jarod