Saving is the most important step on the way to financial well-being, both in the short-term and long-term. Short-term savings can provide you with an emergency fund that you can tap in to in the event of an unforeseen, large or urgent expense. Meanwhile, long-term savings can help you accomplish goals like purchasing a house, going to college or retiring from working life.

Ideally, everyone should have more money coming in than going out every month. If you are in debt, you should immediately begin paying off your debts (especially high interest debts) before committing any money to investment or savings. Once you are free of debts, begin to build a short-term cushion in case of emergency. And finally, you can begin putting away money for long-term goals like retirement.

How much emergency savings should you keep in the bank? Well, most experts recommend keeping 3 to 6 months worth of living expenses, but this number could vary based on the number of dependents in your household and the type of income you are earning. Once you are free and clear with this amount, you can invest additional savings in stocks, bonds, or riskier places.

As a final note, it is important to remember that you should not rely on credit cards or investments to become your short-term emergency savings. Credit cards can easily put you in substantial debt while selling investments before they are due can levy significant fines.

It is very important for consumers to stay prepared in today’s uncertain economy. A couple months ago, economists were concerned about some defaults in a small portion of the economy. Now the problems have spread into the entire mortgage market, credit markets, and the larger overall economy. How far this problem goes remains to be seen, but there are some steps that you can take to protect yourself.

Pay down your debt
Debt that may not seem like much now can become troublesome when the economy turns. Home equity lines can try up, hours can be cut at work, and investments can underperform. Combined, these events can make paying off high-interest credit cards or other debts nearly impossible. If you need help, be sure to consult a credit counseling or debt negotiation service.

Postpone major purchases
Major purchases can cost a lot not only now but in the future. They can tighten your spare cash, lead to future payments (if on a payment plan), and can often lead to buyer’s remorse. Additionally, the US dollar is very weak right now and may mean higher prices for some foreign goods.

Bulk up savings and investments
Now is a great time to start saving money, max out your 401(k) contributions and setup a Roth IRA. This is especially true if your employer matches your contributions, as this is free money! Saving is best at banks like ING Direct that offer 4%+ interest rates. Also, be sure that your investments are diversified away from one or two companies. Blue chip companies that have strong growth overseas are the safest.

Make yourself valuable at work
One way to protect your job is to make yourself valuable at work. You should carefully analyze taking any available promotions or new work.  Joining a professional network or association to keep up to date with the latest trends and keeping professional contacts are the best way to do this.

The holiday shopping season is quickly approaching and thousands of Americans are poised to spend more than they can afford. One way to avoid this problem is to create a spending plan to limit your spending to an amount that you can afford while keeping the season happy and meaningful. Draft a plan in November and stick with it through December in order to maintain your sanity in January!

Here are a few tips to help:

• Determine how much you can afford during this holiday season.
  
  
• Find ways to cut back on expenses or increase your income by working overtime or taking a part-time job.
  
  
• Make a shopping list and set an exact dollar amount for each person on your list. Remember, it’s the thought that counts – not the price tag.
  
  
• Shop alone so you can avoid making impulse buys and instead of focus on making good selections. Many stores are slower on Monday, Tuesday and Wednesday.
  
  
• Once you’re done with your list, stop shopping!

Do you think bankruptcy will end all your problems? Think again. Many big lenders have found ways to continue squeezing money out of consumers whose debts have been canceled by the courts. In fact, there is even a healthy market for such debts that have been supposedly canceled by the courts being actively bought and sold every day. Five of these companies trading debts are even publicly traded on the NASDAQ! So, how can you avoid these problems?

First, let’s take a look at how and why this practice occurs. A consumer that has $10,000 in credit card debt that was canceled may not technically owe the debt any longer; however, the credit card company may continue to report the discharged debt to credit bureaus as a live balance. This can continue to hurt the consumer’s credit rating and impact his interest rates and ability to obtain loans. And these kinds of things happen a lot more often than many people care to admit.

The practice of buying and selling discharged debts even has some judges confounded. The misconception is that discharged debt is worthless because it cannot be legally collected. However, the value lies in the creditors ability to negatively impact the consumer’s credit report long enough to force a payment just to remove the barrier. After all, the consumers only alternative is to go to court and spend money on a lengthy legal process to force change.

Many of these cases are making it to court these days with companies as notable as Capital One. However, the small number of cases brought to court keeps the strategy a profitable one for those involved in this unethical secondary market. While this may be a significant abuse in the industry, it is one that must eventually be stopped with new laws and harsh penalties for companies that do not immediately remove these debts from customers’ credit reports. Until then, it is a problem that will only persist and there is little consumers can do.

The Midwest appears to be hit the hardest when it comes to the financial fallout of the subprime and credit markets. A recent report measuring the risk of residential mortgage loan delinquencies found that nine of the nation's 10 highest-risk metropolitan areas are in Ohio, Michigan and Indiana. Those states also rank among the top six in bankruptcy filings per thousand people in the year ending June 30th despite a new law making it more difficult to file for personal bankruptcies. A report from the University of Wisconsin Milwaukee showed that the number of homeowners with mortgages in Milwaukee increased 74% in 2006 while the percentage of people paying at least 50% of their income to housing costs nearly doubled to 19%. Obviously, this is a troubling trend in that it is unsustainable. While many economists are forecasting a recover, many still believe that the worst is yet to come...

The financial markets have suffered a significant setback after more than $500 billion in value was destroyed as a result of the mortgage and credit market declines. Losses from subprime, near-prime, prime morgages, CDOs, CLOs, failed LBOs, auto loans, credit cards, and other consumer credit, commercial real estate loans, asset backed securities, and other significant financial losses have sent the USA and other markets into a decline. The subprime losses alone are expected to lead to nearly $238 billion in value being destroyed.

The stock markets are declining so rapidly because not all of these losses are marked to market yet. This means that companies have not yet posted the losses realized from these declines by updating the estimated value of their portfolios. For example, if a company purchases a $100 billion subprime portfolio in 1999, they are not required to update the value of the portfolio in realtime. Rather, they get to do it quarterly or even yearly. Compounding the problem is the fact that many of these securities are so complex that they become almost impossible to value. After all, we have seen many financial institutions suggest losses would be limited only to turn around and post larger losses. This has only compounded the fears.

So, if you are concerned by your declining 401k or stock portfolios, know that this problem may be here for some time and it may be best just to ride it out.

Paying bills online has many advantages - it can help you pay your bills on time and keep everything organized in one place. Many banks now offer free online bill paying as a part of their standard checking accounts. On the positive side, online banking offers instant access to your account without having to go to a teller to do business. Funds can be transferred free of charge and schedules can automatically be taken out. Additionally, these banks typically have insurance protections and security guarantees. Online banking can also consolidate your paperwork and make filing for taxes much easier.

There are some negative aspects to online banking, however. Fraudulent operators often try to create mock-ups of online banking websites and use these fake websites to gain access to your passwords and bank account information. The best thing you can do to protect yourself against that is to simply type in your banks URL every time you visit their website. Never click any links from websites or emails to get there unless it is a bookmark that you have created. If you follow these steps, online banking can make your life much easier!

Debit cards are considered to be a more safe alternative than credit cards, since they eliminate the risk of spending more than you are making. However, debit cards have their own set of risks that must be carefully considered before use. Here are some important facts about debit cards:

1. They are Riskier: Legally, credit card liability is limited to $50 and disputing money you owe a bank is easy since you have the money. Debit cards, however, are a different story. It can take banks 10 days or more to investigate for refund your money. More, debit card liability is set at $500 by law with the condition that you notify the bank in 60 days. If you fail to notify the bank, you could lose everything plus your maximum overdraft line of credit. And worse, you are fighting to get your money back - which is an uphill battle.
   
   
2. They are Costly: Debit cards make banks a lot of money. Credit card companies charge the merchants fees to use them, but debit cards also charge a transaction fee to you. There are also some banks that charge a monthly card rental fee and PO fees. They can charge the merchant too if you use the card with a signature!
   
   
3. They are Blocked Occasionally: Some firms regularly block a card in advance for the estimated cost of the trasnaction that may not be completed for several days. This isn't a problem for credit cards since they have lines of credit, but it can hurt your checking account if it comes unexpected.
   

What can you do about all of this? Well, the best solution is to only use your debit card or in-person transactions. Using debit cards online is risky and can open you up to potentially unlimited liability. You may also want to request an ATM card instead of a debit card as they can be much safer. Also, make sure the card is swiped in front of you since some card skimmers can illegally steal your card at restaurants.

Divorce is a lengthy, difficult process that often leaves both parties in financial distress afterwards. It can often be hard to think about money while dealing with the loss of a personal relationship, but doing so now will make it much easier to move on with your life in the future. One of the worst mistakes that divorced couples make is to drag out the process in hopes of securing more money and cause more pain to the other person. Here are five tips that you can use to make finances an easier part of your divorce:

1. Consider Selling the House - Many divorced couples try and hang onto the house at all costs so the kids won't be forced to change schools or their weekly routines. However, they fail to consider several other key factors like mortgage payments, upkeep and property taxes - all of which are substantially more difficult when income is cut in half.
   
   
2. Separate All Assets - It is very important to make a clean financial break in order to prevent any future problems. The best way to start is by ordering your credit reports to find out which accounts are in who's name. Also be sure to remove authorized users from credit card accounts, but you may want to do this over time to minimize the impact on your credit score. And finally, transfer your joint accounts to individual accounts.
   
   
3. Don't rely on your Ex - Don't count on your ex making mortgage, alimony or child support payments in order to survive. You should always assume the worst and count any extra as an added bonus for you. Suing is one option, but falling behind on payments because you were counting on them will only hurt your credit scores.
   
   
4. Remeber Taxes - It is important to realize that alimony is taxableto the recipient and deductible by the person making the payment, but child support is not. Therefore, the recipient is better off getting a large amount of child support rather than alimony and having to pay the taxes on the alimony.
   
   
5. Change Your Will - Remember to change your will or else you could be leaving your family to fight a difficult battle. Additionally, life insurance and retirement account beneficiaries should also be changed.

Consumer borrowing increased at the slowest pace in five months in September, coming in at half of what most economists expected. The slowed growth in credit card debt and car loans came in at just 1.8%, which compares to 9.3% in August. Total consumer debt rose by $3.75 billion in September, which is far lower than the $15.41 billion gain in August.

Why is consumer borrowing down? Well, a recent Fed survey found that banks tightened their lending standards following a severe credit crunch in August in the wake of rising defaults on subprime mortgages. Now that housing sales have slowed considerably, consumers are having a hard time finding lenders willing to borrow against their houses due to declining values.

This may seem like good news, but there is a downside. A slowdown in consumer borrowing will likely also lower consumer spending, which accounts for nearly 2/3 of total economic activity. A slowdown in spending within our economy could compound problems we are already facing with troubled companies hurt by borrowing restrictions themselves. This will lead to lower earnings, increased layoffs, and higher unemployment.

In the end, everything economic happens in cycles and this is simply the trough of one of the cycles. Many economists believe that these events may lead to a recession during the next couple of years following the boom that we have enjoyed since around 2005.

Here are some tips on saving money on insurance:

1. Shop around for insurance. Check out the rates of competing companies before renewing your policy each year. Your state's website may have a good starting point for this search. Lower annual premiums could save you several hundred dollars per year.
   
2. Raise your deductibles. If you are willing to pay $500 or $1,000 on a claim rather than only $100 to $250, you can reduce your annual premiums by several hundred dollars. However, before you make these changes, be sure that you can afford to pay the higher claims if an accident does occur.
   
3. Assess your need for life insurance. You may not need as much life insurance protection if your spouse works and your children are out of the house on their own. Lowering your life insurance amounts can save you hundreds of dollars per year depending on your medical conditions.
   
4. Drop credit insurance coverage on installment loans. Many consumers do not need credit insurance because they have enough assets to protect themselves in the event of a death, disability or unemployment. Terminating this coverage reduces your financing costs by three percentage points, which can save you $1,000 on a four year $20,000 loan.

Here are a few tips to help you save money on your housing costs:

1. Don't pay for space you don't need. American's have large houses and apartments compared to the rest of the civilized world. How much do you really need? Consider using space you have more efficiently or purchasing/renting an area with less square footage.
   
2. Live near where you work. It is not always possible to find a place near where you work, but the closer the better. Driving 5,000 miles less per year can lower you transportation costs by more than $1,000. And gas prices are always on the rise!
   
3. Refinance your mortgage to a lower rate. Refinancing your mortgage can save you a lot of money. A 15-year $100,000 fixed-rate mortgage that is lowered from 7% to 6.5% can save you more than $5,000 in interest charges over the life of the loan. More, for every $100,000 you borrow at 7%, you will pay over $75,000 less in interest on a 15-year versus a 30-year mortgage.
   
4. Carefully select your contractors. Contractors who have successfully performed work for you or your friends/relatives in the past are the best ones to use. Insist on a written, fixed-price bid before any work is started and don't make full payment until the work is done satisfactory and on time.