Credit cards are the leading culprit. But debt is a state of mind.

Some people resolve to stop smoking every New Year’s but most make financial resolutions — to become “fi nancially responsible.” This is harder to do than quitting smoking but equally important.

DEBT-FREE FROM NOW ON…

PAY OFF CREDIT CARDS

Making only the minimum payment each month is throwing good money after other good money.

The CreditCards.com payoff calculator says if you have a balance of $10,000 at 17 percent annually, a minimum payment of 4 percent of the balance or $25 (whichever is highest) it will take 11½ years to pay it off—and $5,241 in interest.

tulsaworld.com/creditcalculate

CONTROL CREDIT CARD USE

Keep one lowest-interest card and cut the others up. If you use a card for meals out, pay it off monthly. Before charging on the card, tally your monthly take-home pay, subtract all the funds needed for fixed expenses and whatever you have left over is all you can spend on a new debt. Just save up whatever your new “necessity” costs and buy it with cash.

MAKE A BUDGET

If you’re a two-income family, identify all income and debts and decide who will be in charge of the budget, paying the debts and making buying decisions. See the AFSAEF’s publication “The Consumer’s Almanac” for an item-by-item list of what should be included in a household budget.

Tally monthly take-home pay, savings and

tulsaworld.com/consumeralmanac

RAINY DAY FUND

Stuff happens! Bankrate.com, says everyone needs a “rainy day fund”—liquid cash—to cover unemployment, ice disasters and other emergencies. It should be enough for six months of living expenses: utilities, house payments, car insurance premiums, car payments, groceries, gasoline and COBRA (health) insurance. Using high-interest credit cards for such expenses is ill-advised. The fund should contain $4,500 per person and $12,000 for a family of four.

SAVE MONEY. BUT HOW?

There are three rules for saving money, said Margo Mitchell, president and CEO of Credit Counseling Centers of Oklahoma in Tulsa.

1. Pay yourself first. Before paying your bills, make a deposit to your savings account. If you wait until the end of the month, you might not have the money.

2. “Before buying anything, ask, “Is this a ‘need’ or a ‘want?’ ” A need is necessary for survival. A want is something extra that you can do without. You can save money if you eliminate the wants from your spending habits, she said.

3. Calculate the true value of an item by fi guring how many hours you must work to pay for it. A pair of $200 shoes will cost you 2½ days of work at $10 an hour. This can help you choose a cheaper pair of shoes or to do without new shoes for the time being — either choice saving you money. Saving requires discipline but pays big dividends. You don’t have to start with a large amount — if you’re paid every 14 days and save $25 a pay period, you’ll have $650 at year’s end.

Route ‘66’

See the Consumer Federation of America’s brochure “66 Ways to Save Money.” Here are a few examples:

Shop at lower-priced food stores and watch ads for sales and buy basic ingredients rather than prepackaged components.

At the store, compare price-per-ounce tags and stock up on low per-unit-cost items. Buy used cars with low mileage from people you know and trust. Keep them going with periodic tune-ups by ASE-certified technicians, infl ate their tires properly and change their oil per manufacturer’s recommendations.

Buy the lowest-octane gasoline at the cheapest stations.

tulsaworld.com/ save66ways

Which consumer topics interest you the most?

The Tulsa World will begin a weekly Consumer Page on Jan. 9. Tell staff writer Phil Mulkins what topics you would like to see covered.

Phone 699-8888 E-mail phil.mulkins@tulsaworld.com Mail Phil Mulkins Tulsa World Consumer PO Box 1770 Tulsa OK 74102-1770