Your Biggest Money Problems, Solved

Managing your finances becomes tricky when you add a kid or two (or three) to the mix. After all, you can stretch your dollars only so far, making it even harder to get out of credit card debt, buy that first home, or survive on one income. Don't despair! These tips from real families and financial experts will help you over those financial hurdles.

The Problem: Getting Out of Credit Card Debt

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Fifty-five percent of Americans ages 30 to 39 carry a balance. The average amount: $2,000, according to the Federal Reserve's Survey of Consumer Finances.

Simply put, your debt is making you sink deeper into debt. "If you don't pay your credit cards off every month, then you're throwing a lot of money out with the interest you're paying," explains mother of two Jean Chatzky, author of Make Money, Not Excuses (Three Rivers Press) and financial editor for NBC's Today show. In fact, you'll probably pay at least twice the original cost of something if you pay only the minimum due each month on the card you charged it on. Though settling your full balance may not be possible, pay as much as you can -- even if you just round up from the minimum.


Negotiate. "Getting your interest rate as low as possible is the most important thing you can do to get out of debt," explains Michael B. Rubin, CPA, CFP, author of Beyond Paycheck to Paycheck (Wachtel & Martin) and a father of two. This is especially true if you're paying more than the average interest rate of 14 to 15 percent. As long as you've been making the minimum payments, you're not considered a high risk, which means it's possible to negotiate. First, collect competing offers by looking at or "Next, call your credit card company and ask if they can match the lowest interest rate you find," Rubin says. "Tell them you're a good customer who pays at least the minimum each month and does so on time. If they say no or don't lower it enough, tell them you have offers for cards with lower interest rates and will close your account with them if they can't change your rate." At this point they'll usually negotiate. (And don't actually close an account, because this affects your credit score.)

Use "found" money wisely. "It was very hard to set aside money each month to pay our credit cards, so we relied heavily on lump sums of money to help us get caught up -- such as my husband's year-end bonus and our tax refund," says Jennifer Oswald, a mother of two from Birmingham, Alabama. "In just a couple of years, we were free of debt."

Charge within your means. "In order to get out of the hole, you have to stop digging," says mother of one Liz Pulliam Weston, author of Easy Money (FT Press) and personal finance columnist for MSN Money. "To help get rid of our debt and keep from accumulating any more, we created a rule that we only charge things that we currently have the money in the bank for," says Gwyne Ortiz, a mother of one from Glendale, California.

Control the must-have impulse. "Often we walk into a store, see something, and think, I need that, but this is how we build up debt," Weston says. Instead, create a pause button: write down the item you're considering, and wait at least three days before buying it. "This way, you don't forget about it, but you're also not giving in to the impulse, and you take time to seriously consider if you need it," Weston adds.

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