getting out of debt

We promise: After swearing off that $5 latte habit, these simple cutbacks won’t hurt a bit. Here are 4 simple steps you can take to start saving cash today.

1. Seek Cheap Thrills
You think your morning latte is a right, not a choice? Get over it. Coffee can be made at home just like movies can be rented from the library (or Netflix). Skip the pricey gym membership (you know you won’t go) and get a great yoga DVD. When it comes to dining out, why not head into the kitchen together instead.

2. Stop Phoning It In
If you and your spouse are on different providers because he just had to have an iPhone whereas you’re glued to your BlackBerry, investigate a family plan on the same network. Look at old bills to determine how your monthly minutes break down and pick the tier (most companies have levels of minutes per month) that makes the most sense. If you text more than you call, get a plan with unlimited in-network messaging. While you’re at it, review all of your bills -- landline, cable, Internet -- and see if you can consolidate them into a “triple play” to save money.

3. Quit Being a Lazy Luncher
If you eat out for lunch five times a week and spend about $5 a clip (at the very least!), you’re looking at about $1,300 a year in sandwiches, soups, and other fast foods. So start brown-bagging it. If you want to make vegetarian chili in your slow cooker on Sunday, make sure you have plastic containers on hand so you can dish it out for lunches (or dinners) in the coming week.

4. Keep the Airwaves Open
If you share a checking account and both hit up the ATM a few times a week without mentioning it to one another, you’ll be greeted with an “insufficient funds” message sooner than you think. Keep each other in the loop and say something as simple as “I’ll be taking out $80 today.” A little more conversation goes a long way toward helping you save for the house or vacation you’re lusting after.

Save more by cutting your bills- find out how here.

Money might make the world go ’round, but it’s also the number-one cause of marriage meltdowns -- no matter how much or little you have. Much like fighting over what kind of sofa to buy (the vintage-modern versus the sectional with built-in recliners) or which color to paint the den (robin’s egg blue versus Pittsburgh Steelers yellow), squabbles over how to manage your money as a couple really come down to a matter of style.

But unlike decor trends, there’s no “in” or “out” when it comes to financial points of view. The best way to mesh those money mind-sets is to communicate (that means talk, people), agree on a common goal, and stick to it. To get you thinking about what dinero-related glitches you’d like to square away in your own marriage, we asked three brave Nestie couples to tell us about their own money issues. Carmen Wong Ulrich, anchor of CNBC’s On the Money, acted as financial referee, listened to both sides of the story, and gave these newlyweds savvy advice. Read on to see what tools they’ll use to make over their money relationship...you may want to steal them for yourself!

Click here to find out how we took these couples to budget rehab.

Q: How do I get my credit score?

A: Three nationwide credit agencies (Equifax, Experian, and TransUnion) are required by law to provide free credit histories to anyone who asks. Once every 12 months, you can order your report -- which will have your score -- at AnnualCreditReport.com. After finding out your score, make sure everything is accurate. Have you closed accounts that are still listed as open? Any disputes you have should be sent to both the creditor and reporting agencies, and make copies for your own records.

Q: What credit score will keep me from getting a loan?

A: A score above 620 is considered good, but 650 is better and 700 makes you more desirable when applying for a mortgage. On the other hand, a score lower than 580 will likely give you trouble. About 35 percent of your score is based on your payment history, and any old late payments (that nasty college phone bill!) will stay on your record for seven years after the original due date. The best way to improve your score is gradually: Make all your current minimum payments on time, pay any past debts, and keep card balances down to about 40 percent of your credit limit.

Q: Will applying for more credit cards improve my score?

A: In general, a safe rule is not to apply for more credit cards than you actually need. In fact, every time you apply for a card, your score will go down by five points. But if you use it and make your payments on time, those points will quickly be restored. As long as you keep your balances low (within 40 percent of your maximum) and make all payments on time, credit cards can eventually help your score improve.

Q: How long do I have before my late payments are reported?

A: Late payments are usually reported to the credit bureaus within 30 days. However, it all depends on how often your creditor presents new information to the credit reporting agencies. Remember: Any late bill is eligible to go on your record, so unless you make arrangements with your creditor not to submit it, it'll eventually appear on your report.

Q: I have bad credit. Have I ruined our chances of getting a loan?

A: Not necessarily. If worst comes to worst and rocky credit has turned you into the most unpopular loan-seeker on the block, think about applying for the loan under your spouse's name only (assuming his or her credit is in better shape than yours). It's not ideal because, with just one salary involved, you'll have less-attractive loan options with higher interest rates. But don't despair: When you've finally whipped your own credit into shape, you can add your name to the paperwork later.

Nestperts Rich DiMaggio, author of Credit Repair: What the Credit Industry Doesn't Want You to Know; and Brette Sember, author of The Complete Credit Repair Kit

>>> Use our debt calculator
>>> 4 hot-button money issues
>>> Get out of debt checklist

If you're struggling with debt, clearly you're not alone. Being debt-free takes resolve and a little know-how. We'll help you get on the right track, starting with these seven steps.

Step 1: Separate "Bad Debt" and "Okay Debt"
How can you tell the difference? "Okay debt" has an interest rate under 10 percent -- preferably with tax advantages to boot. In the best-case scenario, the thing you bought with borrowed funds will appreciate in value (think mortgage and even that student loan). "Bad debt" is everything else -- especially credit card debt.

Step 2: Don't Pay by Their Rules
The "minimum amount due" is cleverly calculated to keep you beholden to The Man for your entire adult life. A $4,500 balance on a card with an 11-percent APR will take 44 years to pay off, even if you don't put another dime on the card. Oh, and the interest you'll pay on that loan? A whopping $17,000! That's why you're going to pay by your rules. Keep reading.

Step 3: Get Intimate With Your Visa
Gather your bills and clear a space at the kitchen table to line them up. Rank your cards from the lowest to the highest interest rate. Identify the one major credit card with the lowest annual interest rate and room for a balance transfer. See which high-interest rate cards you can phase out of your life and move to the low-interest card.

Step 4: Play the Heavy With Your Existing Lenders
Grab a bill from any account charging you more than 14-percent interest and ask to have your rate lowered to 11 percent. Say you've received offers for much lower-rate cards. Your lender would rather keep you as a customer than pay $50 to $200 to find your replacement. Plus, studies show that more than half of the customers who tried to negotiate lower interest rates had some success.

Continue reading

Use our Get out of Debt Checklist to help!

Card companies are offering deals -- from lower fixed rates to write-offs -- even as they cut credit lines. Here’s how to control your plastic.

Debt-Renegotiation Tactic: Get Your Story Straight
Without knowing exactly how much debt you’re dealing with, you can’t put a dent in it. Pull together all of your monthly statements from lenders and make a list of who you owe and how much it’s costing you every month.

Do you have credit cards with interest rates of more than 12 percent and additional monthly fees of more than $5? Try to reset these rates with the existing card company or by taking your business elsewhere. Hint: You’re much better off negotiating with your lender if you know where any problems are on your credit reports -- get them free at AnnualCreditReport.com.

Debt-Renegotiation Tactic: Ask…and You May Receive
Now that you’ve got your head around your debt, it’s time to try charming some customer service reps. Has your ability to meet your obligations changed lately, or do some costs look totally out of whack with the best interest rates at comparison sites such as BankRate.com or Credit.com? Can the bank beat a better deal you have elsewhere on balance transfers, refinancing or other account changes? You’re looking for a break on the interest rate, a refund of any late or transfer fees, a shift from a floating to a fixed rate with extended terms or, at the very least, a reduction in the size of your minimum monthly payments.

Warning: it’s a bad sign if the credit card company is already calling you looking for overdue payments, but it may give you extra negotiating room to ask for a reduction of the overall debt, especially if you’re a renter without obvious assets. Bank of America, HSBC, and American Express, among other companies, have been eager lately to settle overdue accounts on a case-by-case basis, even if they don’t always get paid in full.

The banks’ new recession logic? Default rates have recently been skyrocketing to double digits along with unemployment -- better to get something rather than nothing. Also, the credit crisis has made a lot of the bad debt worth more as a write-off than for resale. Whatever's offered, keep notes and give yourself time to comparison shop before making a final decision.

Debt-Renegotiation Tactic: Hop on the Transfer Train
Short of getting a lower fixed rate or extending your payment period (both good things), a card company might give you a deal on transferring balances from somewhere more expensive. You’d never know it from the 15- or 20-percent rates on many card balances these days, but the truth is that the costs of lending to the credit-worthy are at all-time lows thanks to recent stimulus programs. Do yourself a (big) favor and search out the best transfer offers through “rate surfing” sites such as the independent CreditCardForum.com. Hey, it can't hurt!

As a general rule, you want to lower your overall interest costs by transferring most (if not all) of your high-interest debt to new, cheaper sources of credit. Teaser rates for balance transfers can be as low as 0 percent for 12 months. But you must be disciplined enough to calculate the transfer costs, which can run upward of 3 percent. Make a note on your calendar ahead of any rate reset. The best deals tend to come from new cards with fewer rewards programs and apply to balance transfers rather than cash advances.

Debt-Renegotiation Tactic: Borrow Elsewhere

Short of rate-surfing tricks, credit cards are generally the priciest of loans. That means you’re almost always better off borrowing against your home with a second mortgage, also known as a home equity line of credit (HELOC), where the best rates dropped under 5 percent this year. Another option: Get a seller to finance a big purchase, such as a car or flat-screen.

There are informal sources too. Most savings accounts pay practically no interest now, so offer to split the difference with a good friend or relative. Instead of paying your card company 12-percent interest, offer to pay your friend 6 percent. You’ll get a really great deal for yourself and your friend will then be earning three or four times the current rate of most savings accounts out there. Established services such as VirginMoneyUS.com will even help you out with the record keeping.

Debt-Renegotiation Tactic: Go in Circles
Pursue the best deals and negotiating leverage by retracing your steps: If a new credit card is offering a monthly 5-percent rate on a balance transfer, call the old card and explain that you’ve been a loyal customer, but you need better terms than your current 15 percent to avoid closing the account (and then taking your business elsewhere). Your bargaining position gets stronger, especially if you have other lines of credit, like home-borrowing, at your disposal. So make your card work for you!

The good news is that most standard credit card borrowing is such a bad deal that a little hustling can save you lots! You may be able to save $1,000+ a year in interest charges for a balance transfer on $10,000 worth of debt.