Once the transactions for our primary checking account were entered, and the balance was reconciled, it’s time to start entering the transactions for the other accounts.  If just biting the bullet and getting started in the first place was the ugliest frog on my plate, going through about thirty pages of credit card transactions for last year’s charges to our primary credit card has got to be the second-ugliest frog.

Our primary credit card’s transactions was a big chunk of work, for sure, but between the checking account and this credit card I can now paint some broad strokes about how we spent our money last year. We did use cash now and then, but our checks and our credit card accounted for the large majority — most –of our cash flow.  We got a clear picture of our big spending weaknesses, the most glaring of which was how much we ate out last year.

Note:  these are broad strokes.  I had a year-end summary of transactions in front of me, which I transferred into Quicken.  This year-end summary has dates, merchants, and amounts.  I didn’t track down then whether my purchases at Sheetz were gas, or food.  Our trips to Costco could have been groceries, electronics, books, gifts, or household items, but again I didn’t get the receipt out then to check.  Right now purchases from Costco are all “Groceries” even though I know they’re not.  Purchases at Sheetz were “Auto:Gas” if the amount was about $20 or more, and “Dining” if the amount was well under $10.  I could have gotten some of these categories wrong.  But for broad strokes, they’re approximately correct, which is all you can expect from broad strokes, anyway.

Will I stop at the broad strokes?  No.  I have boxes of receipts that I can match up with the credit card charges and the checks to add some shading and detail to the big swaths of financial color.  I’ll need to do this for any numbers that will go on our taxes, because the closest that the IRS gets to “broad strokes” is “rounding to the nearest dollar — but only for amounts that are entered on the tax form.”

So just as a recap, here’s what I did to get the broad strokes of our spending for the past year:

• I entered the transactions from the account where we had our biggest cash flow. This was one credit card.  It was convenient to have a year-end summary that had all of the transactions for the previous year, roughly categorized.  If we didn’t have that, we could fall back on our monthly statements.
• As I entered them, I tried to get the category of spending roughly correct. A trip to Costco can mean a purchase of a bunch of different kinds of things, but “Groceries” was close enough.  What we bought at Costco were mostly groceries, and that’s fine for a first cut.
• I left detailed category splitting for later. Just like I didn’t get distracted with entering all of the transactions from other accounts when I was getting started, I didn’t hunt for receipts at this point.  Doing that will come later when I can concentrate on it.
• This took a few nights, but doing a few pages each night was manageable. That’s one of the benefits of starting a little earlier than the first week of April: there’s time to do it right, at a pace that won’t bore an ulcer in your stomach.  I didn’t have to push myself so hard that I lost concentration and started making a lot of silly mistakes.
• After entering all of the transactions, I made sure the amounts were correct. I only found a half-dozen errors in about one thousand transactions.  I made use of the “cleared” checkbox in Quicken accounts to mark off the amounts I had checked.  I’ll use it again when I find the receipts for our transactions.

So now I have well over 90% of our financial transactions in Quicken, with rough allocations to categories.  The next steps are to fill in the transactions for the rest of the accounts, and then work on breaking down the transactions using what receipts we have.

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This series of posts, entitled “Organizing for Taxes and Beyond,” will follow through the process I use, warts and all, to gather my financial life into some semblance of organization so that I can track our family’s income and expenses so that we can make concrete, realistic goals.

The tool I’ll be using is Quicken Rental Property Manager.  (I have the 2010 version but the 2011 version is the current one.)  My goal with entering my financial data into Quicken is to enlist its help as much as I can for completing my 2010 taxes.  Since I became a landlord this past year, I’ll be needing to fill out more tax forms in more places, so any help I can get from the software will make things easier.

The rest of this post will step through how I constructed the accounts I needed in Quicken by entering my 2010 transactions from our primary checking account.  Sleeves are rolled up, so here we go!

1. Created a new Quicken file, and created the primary checking account with the starting balance as it was at the end of 2009. Faced with having to import everything from the past year into Quicken, I started with our primary checking account.  Transactions from this account touch a large majority of the rest of our accounts, so if I can manage to enter the transactions properly for that account, I’ve gone most of the way to setting up the rest of the accounts as well.
2. Started at the beginning of 2010, and began entering transactions from the checking account statements. Now it’s just a matter of getting to work: start at the beginning and move forward.  I enter as much about the transaction as I can from the account statements and the check registers.  For checks written against the account, as well as electronic fund transfers (EFTs), I tried to get the payee and the expense category correct (in addition to the amount, of course!)  If I didn’t know for sure, or if it was possible that the expense could fall into more than one category, I categorized the expense as “Not Sure” — yes, there is a category called “Not Sure” in Quicken! — or I noted this in the memo section of the transaction.  I’ll work on figuring out these missing pieces of information later from the receipts.
3. When I hit a transfer into, or out of, another account that I wanted to track, I created the account. The first month’s worth of checking account transactions took most of an evening to do, because one transaction could trigger the creation of several new accounts (in Quicken).  My first three transactions of 2010 were (a) a mortgage payment, (b) a Prosper.com transfer, and (c) an ING Direct transfer.  The first transaction triggered two accounts: an asset account for the house, and a loan account for the mortgage against the house.  The second transaction triggered creation of an account to hold Prosper.com loans.  (This account is now a “placeholder” account; I track transfer of money into and out of the account, but do not track the individual loans yet.)  The third obviously required creation of an ING Direct account.
4. I created accounts, but I didn’t enter any other transactions that didn’t involve the main checking account. To keep things simple and straightforward, I didn’t enter transactions that didn’t involve the main checking account.  This means that all of the accounts (except the main checking account) will have an incomplete set of transactions when I’m finished entering the transactions for the main checking account.  This is all right.  I’ll revisit all of the accounts to enter transactions.  It would take too much time to shift gears entering transactions for a bunch of different accounts.
5. I took the time to track the details of my paycheck. I could track only the net pay from my paychecks, but by tracking all of the taxes and deductions I can have Quicken do some heavier lifting with tax preparation as well as report creation for retirement accounts and flexible spending accounts.  Saving my paycheck as a “scheduled transaction” in Quicken made editing later paychecks fairly easy.
6. For credit card payments from the checking account, I created the credit card accounts, but held off entering purchase transactions for those accounts. Again, I didn’t want to get sidetracked, so I followed the reasoning as in Step 4.  I have credit card accounts that have large positive balances (I’ve made payments from the checking account, but haven’t entered any purchases!)  The purchases from my main credit card will be entered after I’ve done the transactions from the checking account.
7. After entering six months’ worth of transactions by hand, I downloaded the rest from my credit union’s website. Six months were all that was kept, but correcting the imported transactions and recategorizing them was pretty quick by comparison.  I rocketed through the last three months of the year.

Now, I have a fairly complete set of transactions for our primary checking account, and have created accounts for many other linked areas of our finances.  The next task will be to enter the transactions from our primary credit card.  It’s this account that will contain the large majority of our spending transactions, and it will be the topic of the next post in this series.

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I have had very little success with managing money. I have gone bankrupt once ($50K in credit card debt) and since then I no longer have credit cards (just a debit card) but my spending is still totally undisciplined. On a good month, I simply spend everything I make… on a bad month I dip into the leftover money that I got returned to me in the bankruptcy when my property was sold. So, basically a basket case.

I have tried talking to a financial professional but he said “keep track of your expenses for a month and then come back to me”. I asked him why he can’t just use my bank’s online banking site, since I use my debit card for everything, but he said that the bank’s site is not detailed enough, since it only says which stores, etc. I paid and not exactly what I bought. I keep telling him I just am not disciplined enough to keep track of my spending and he said, “well I can’t help you with that” and that was the end of it.

Any ideas on getting out of this rut?

Great question, no?  Among several good answers was mine:

You have to track your spending for a month, down to the cent.

Without those records, the person trying to help you has no real data.

Even a week would be a start. Heck, try just doing this today. See if it works for you.

Throughout each day:

• Start with some predictable amount of cash ($20, or whatever you want, really).
• Take a brightly colored Post-It and put it into your wallet. The one that’s about the size of an index card is ideal. Best idea is to fold the Post-It around your cash so that you can’t help but see it when you take the cash out.
• Carry around a pen or pencil. Each time you spend cash, write it down (what it was, and how much) if you don’t get a receipt.
• Every time you use your debit card, be sure to get an itemized receipt. If you don’t, write it down as if it were cash.

Each evening:

• Look at what you’ve written down from what you’ve spent cash on. When you subtract the total of those purchases from the cash on hand you started the day with, it should match. If it doesn’t, figure out what the difference is right then. It won’t get easier to track down later. It shouldn’t be that hard. Just mentally go back through your day and you should remember. If you just forgot one thing, the amount should tell you what it was you bought. (“75 cents off? Oh, right, that was a Snickers bar from the vending machine.”)
• Put that Post-It and the receipts in one place. Paper-clip or staple them together. Put today’s date on it.
• Congratulations! You just have a record of everything you spent for that day.

At the end of a month (or week, or whatever period you want):

• Go through your daily records and categorize the expenses by type. Then stuff will start to jump out at you. (“$45 per month on coffee? No way!”)

Each day you do it successfully it will get easier. Let us know how it works out! Best wishes!

After writing about this stuff for over five years, you’d think I’d have this stuff down, right?  Other bloggers have been tracking their finances in Quicken for well over a decade, so I’d be all over this stuff, right?

The truth is, I have the same level of follow-through as Bart. My concentration goes elsewhere, change gets thrown into a big bowl at the end of the day, and receipts gets thrown into a box (just so I have them) but stuff is still rarely tracked except for a cursory glance of the credit card bill to make sure there aren’t any fraudulent charges creeping up there.

The truth is: I need to follow this advice as much as he does.

And, well … what do you know?  It’s the beginning of a month!  Let’s see if I can follow my own advice.

If something different has worked for you, I’d love to hear it in the comments!

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At work it sometimes means announcement of raises or year-end bonuses when there’s profit to be shared.  People may be entering the new year with a fatter wallet and a bigger paycheck.

This holiday season?  Not so much.  Googlers notwithstanding, many people found out that not only were there no year-end bonuses, but there was no year-end raise, either.  About 1.4 million US Federal employees are likely looking at no annual raises in 2011 and 2012. With the prices of groceries, gas, health care, and many other things steadily climbing, staying put is actually falling behind.

While people don’t wish that a pay freeze would happen to them, it’s far from unusual.  Here are seven things to consider doing if you’re going to be pay-raise challenged for a while:

1. Give thanks for your job. For Christians, like myself, this is part of 1 Thessalonians 5:18; it’s not a quid pro quo exchange with God, but instead a recognition that everything we have comes from Him.  In any case, a thankful heart is a much better launch pad for being proactive.  Spinning wheels with worry just makes a lot of bad-smelling smoke and wears out the tire treads.
2. Don’t panic. A pay freeze is not a pay cut, and it’s not a pink slip.  For the time being, the paychecks will continue to come in.  This is not a worst-case scenario.  Food will continue to go on the table, the lights will continue to come on, and the water will continue to run.  The basics, and a lot of the extras, are still there.
3. Recognize the wake-up call. If this pay freeze came out of the blue — heck, even if it didn’t — it’s still jarring.  Raises aren’t always regular.  It’s possible to experience a backslide with income.  Jobs, even “safe” ones like government jobs, aren’t bulletproof.  Were you ready for the announcement?  If not, it’s time.  Get ready.  Don’t ignore the wake-up call.
4. Make some battle plans. The Bad Economy is knocking on your door.  Maybe you already have another job or have a side business going, or you’ve gone back to the basics cut your expenses and have started to do the little money-saving things again.  That’s great.  Keep doing more of that.  If not, look at options for earning more and spending less.  Since you’re already not in panic mode, you have time to plan for your best way to fortify your finances and find that money that you thought you were going to get.  Revisit the basics and go from there.
5. Work your thaw-out plan. A pay freeze from one job is just that: a pay freeze from one job.  The income can be made up elsewhere, and since you’ve made plans for how to do that, you just do it.  If you feel most comfortable with another job, then go out to get one.  If you think wringing the unsatisfying expenses out of your budget is the way to go, then find less expensive alternatives to your gourmet premium whatevers.  If you want to tackle a side business, then go for it.  Plan enough to get started, and sand down the rough edges along the way.
6. Build momentum. If the pay freeze on the one job is the worst of it, hallelujah!  If it isn’t, and The Bad Economy ends up pounding the door in and you lose that job, then you’ll be glad that you just didn’t coast when you felt comfortable again.  Build the side business more, or take a battle axe to your expenses.  Build up a nice emergency fund.  The more cushion you have, the more time you have to wrestle your way out of a financial head lock.
7. View the entire process as a test. Life has ups and downs.  This is a down part, a trial, a test.  Tests teach you what you know and what you don’t know.  Just going through the test has its own benefits, even if the test itself isn’t fun.

Oh, by the way:  I’m going through this myself right now, so you’re not alone.

(Thanks to Blonde and Balanced for including this post in the Carnival of Personal Finance.)

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Two thousand eleven will be upon us in only a month.  Here are a few tasks that are worth doing to tie a financial bow on 2010:

• Review your health and dental care choices if you have them available. At many employers it’s open season — that time of year where changes can be made to your benefits that can’t be made at other times of the year under normal circumstances.  Check with the doctors and dentists that you go to frequently for your care to see if they’ll still be taking the same insurance, if they’ll still be in its preferred provider network, etc.
• Review use-or-lose accounts. Pretax flexible spending accounts (FSAs) are use or lose from year to year.  Some employers allow a grace period after the end of the calendar year for using up the previous year’s allotments, but not all.  Review your plan and how much you have left in your FSA to see if you have some spending to do.  Even if you have a grace period, check to see that some of the expenses that are allowed in 2010 aren’t disallowed in 2011.
• Review your withholding. Have you been withholding enough from your paychecks to cover the federal and state income taxes you’ll owe?  There are still a few paychecks left in 2010 to close the gap on what you might need to pay the tax man for all of your hard work.  Underwithholding may result in penalties.  The IRS has a withholding calculator that can help.
• Prepare for filing 2010 taxes. If you’re due a refund for your 2010 taxes, the faster you get your completed return in, the faster your money comes back to you.  Make a list of who needs to send you what tax documents, and by when.  As a guide you can review what documents were sent to you for your 2009 taxes.  That way you’ll know who’s holding up your refund and can get on the horn with them.
• Review possible deductions that you can itemize, and do them before year’s end if appropriate. If you’ll be itemizing your deductions for your 2010 taxes, consider whether it would make sense to take the deductions now, or wait until 2011 to take them.  There are times for which each is appropriate.
• Give some thought to 2011 financial goals. Consider starting work on them now rather than on January 1st.  Michael Masterson’s The Pledge compiles some of his secrets to success and is imminently actionable.

What other year-end financial tasks do you do?

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Case in point, here is an excerpt from here recent post on meal planning:

I strayed from my planned menu for the second half of last week, but we didn’t eat out, so I truly believe that any menu plan is better than none. It keeps me thinking about cooking and eating at home, rather than planning to go out . . . I’ve just moved the meals planned for last week that didn’t get made to this week.

Let’s break this down a bit:

• The goal of the meal plan is to replace eating out. Eating out is expensive.  Food by itself is always less expensive than food plus all of the other costs of running a restaurant.  But since eating out is easier than eating in, it’s what gets done in a pinch when hunger hits and the stuff to make the meal at home isn’t there.
• Having the meal plan in place really is better than having nothing in place at all. Fail to plan, plan to fail, and all that.
• Meal planning has some up-front costs that can be used again and again. Putting one meal together takes time, but once it’s done, it doesn’t vanish into thin air.  It’s there to be inserted again, moved around, and modified any number of ways.
• The meal-planning habit breaks the eating-out habit. The more meals that are planned, the more this becomes the default instead of “Let’s order pizza.”

My wife has begun to plan some meals for us, which rocks.  She’s been playing with the meal planning templates over at Vertex42.com.  They’re free.  Fortunately, she doesn’t need to plan too many different meals to keep me happy.  One thing I am a creature of habit is with the types of foods I eat regularly.  I like a lot of different kinds of foods, but it boils down to only a handful of dishes.  I can get by on rice and beans, apples and bananas, oatmeal, and a few other things at work for a good long time.

This was all precipitated by looking at our dining out expenses, which were pretty high.  I’ll discuss why this is an issue in a later post in my Mvelopes series.  (Promise!)

If you plan out your meals, what tricks get you the farthest?

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These aren’t really needs when we get down to it, of course.  They’re wants.

The stuff we really need — after breathing — are (a) food (and clean water) in our stomachs, (b) clothes on our backs, and (c) cover over our heads.  To this you might add basic medical care, education, and a few other very important things.

Most people (especially if you’re reading this now, and especially me) can stand to cut out a lot of non-essential items if it’s needed.  This is extreme downsizing and simplification.  It isn’t fun, but it can be done.  Moreover, what’s spent on the essentials can be trimmed way down to boot as well, by doing the little money-saving things again.  Even the essentials can be simplified and scaled back!

Here are a few ways to get by on spending less for food:

• Consider generic brands over name brands.  Generic or store brands are usually (but not always) cheaper than the name brand, and for some products they’re comparable or even better than the name brands.  I prefer store brand diet soda in some cases because I like the taste of one sweetener over another.
• Use coupons for items you buy anyway.  You can get them a number of places, like your weekend newspaper, from magazines, online at the websites for the products, or online at places like CoolSavings or MyPoints.
• Substitute less expensive foods.  How about oatmeal instead of cereal?  How about eggs instead of meat?  How about rice and beans?
• Buy food that requires more preparation or reconstitution.  As in dried beans over canned beans, dehydrated milk over milk in a carton, raw oatmeal over instant oatmeal, or big bags of rice over instant rice.  The other advantage of reconstituting food is that it may keep longer than the “fresh” food.
• Buy food with less packaging.  Packaging means extra cost, and the food tastes the same if it can be resealed and consumed in time.  Binder clips work fine to keep “family-size” snack bags shut.  Reusable storage containers are great for all kinds of food storage.
• Buy in bulk if the price is right and if you know you’ll use what you buy.  We buy rice 50 pounds at a time, and use it.  I buy the big Costco-size box of oatmeal, and eat it.  It usually saves money to buy in quantity.
• Spend more at the grocery store and less at the restaurant.  The cost savings is clear here.  Eat in with friends as opposed to eating out with friends.
• Learn a few easy, cheap recipes.  I know how to cook rice well enough so that I can prepare a cheap, filling lunch (and dinner sometimes) merely by putting a few ounces of beans over the top with some Worcestershire sauce.  Heck, adding rice to a can of soup works, too.
• Be diligent about consuming leftovers.  Odds are you’ll only be eating the same stuff a few days in a row at most.  (Except at Thanksgiving: It’s turkey leftovers for at least a week!)

Cut your clothing bills, too:

• Make your clothes last.  Making things last can be a money-saver.  My wife is an excellent sewer and has given some of my clothes an extra life.  Simple Debt Free Living has a decent introduction and link collection for clothing repair.  But even before that, be kind to your clothes in the washer and don’t overdry them. 
• Check out yard sales.  We’ve found great deals on baby clothes at yard sales, as in maybe a dime apiece for a bagful.  My wife and I have found clothes for us, too.
• Check out thrift shops.  Sometimes the donated clothing has hardly been worn.  The bigger ones usually have a good selection of sizes.  Sometimes they run sales to make room for things.
• Check out consignment shops.  These are perceived as a little higher-brow than thrift stores but the premise is the same:  buy used and save.
• Check out the clearance racks in department stores.  Some department stores perpetually mark things up just to mark them down, but there are still good deals to be had at places like Macy’s or Kohl’s.  Since my wife has a Macy’s store charge card she gets special coupons that get her some really good deals.  Wal-Mart’s hard to beat, too.
• Check out eBay.  There’s always eBay!  They’ve been getting much more buyer-friendly these days.  Buyers cannot receive negative feedback anymore, and eBay is also waging war against inflated shipping charges (which is in their interest, but that’s another story).

Cutting costs on shelter can be a touchy subject but please remember, it boils down to a roof over your head:

• If you’re renting, think very carefully before buying a house.  Owning a house is a worthwhile goal but it can be very expensive.  During the real estate bubble times of the past few years it was more expensive to own a house than it was to rent.  Or, if it was affordable to own a house, in some areas, it would become too expensive later (adjustable rate mortgages).  The start-up costs can be a bit of a shock.  Plus, you’re a lot less mobile in a home than in a rented apartment.
• Reduce operating costs of your living space.  Keep the temperature warmer in the summer and cooler in the winter.  Use compact fluorescent lightbulbs where you can.  Seal cracks where heat (or cool air) can escape.  Don’t use the clothes dryer for one pair of socks.  And so forth.
• Reduce financing costs of your living space.  Pay the mortgage (or rent) on time.  Consider paying the mortgage down a little faster.  Consider refinancing an adjustable-rate mortgage to a fixed-rate mortgage to remove interest rate risk and take advantage of a depreciating currency.  Work to get rid of private mortgage insurance as soon as possible.
• Test the waters for signs of trouble.  Is the checkbook balance going down month by month?  Why?  Is it due to increasing costs associated with your living space?  Is is possible to move into a cheaper living space if the costs of your current living space are getting out of control?  (A good friend realized this.  His family had built a larger house and had been renting their original, smaller house.  The costs of the larger house were too much, so they are working to sell off that one and move back in to their original house.  Hey, it happens, but they recognized what the problem was and are fixing it.)
• Can someone share your living space?  Can you take on a boarder or a roommate?  An unmarried woman at work has a house and has taken on a roommate to subsidize her housing cost.  Alan Corey did this to great benefit; he took the smallest room in the house so that he could rent out the larger ones for more money.
• No affordable options in your area?  Since moving is costly, it’s usually easier to cut other expenses before contemplating a move, especially one out of town to a less expensive area.  But if nothing else seems to work, this is an option.  It may mean leaving friends and family, and finding another job, but the housing cost issue can go away if the price difference is large enough.
• What if the worst happens and you lose your living space?  There are some options.  They’re not great options, obviously, but better than nothing.  Living after foreclosure or eviction might mean moving in with someone who will take you (and your family if they’re involved).  It can mean finding a church or other group that will take you as a “shut-in.”  It could mean taking whatever job you can and renting by the week (Barbara Ehrenreich, author of Nickel and Dimed found this to be a tough life ).  Even more simply, it could mean pitching a tent or sleeping in your car.  This kind of living isn’t something I’d wish on anyone, but unfortunately more people will be thrust into this kind of situation.  And in any case, it doesn’t have to be forever.

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Buying depreciating, or even consumable, assets with debt often is not a good use of debt in many situations.  Overconsumption, or living beyond one’s means, is usually a bad use of debt.  Buying a car with a loan, though sometimes unavoidable, is usually not as good as paying for it in full.

Then there are the times when people are thrust into massive debt because of a financial catastrophe, like serious illness in the family, job loss, an injury, or a lawsuit.

Whatever the reason for the debt, it must be repaid, and the longer it takes to be repaid, the higher the amount of interest that must be repaid in addition to the amount borrowed.  Carrying debt means sacrificing future income to the debt, as well as any passive income that this future income would earn.  In this light, it makes sense to pay off debts as quickly as possible without opening up the rest of your finances to undue risk.

Here are a few things to consider as you reduce debt:

• Not in debt?  That’s great!  Stay out of debt.  With the economy going downhill, jobs become less reliable.  Now is an especially bad time to take on more debt, or to start taking on debt.  The consequences of getting caught jobless will generally be more severe until the economy recovers, which could take years.  (Yes, years!)  Work on doing the little money-saving things and protecting your income streams so that you don’t have to resort to debt.
• Read books on how to get out of debt.  There are many books out there on getting out of debt.  If you need to be dragged kicking and screaming to face your problem, then Larry Winget’s You’re Broke Because You Want To Be is good for slapping you upside the head and getting you on track.  For a less abusive, shorter, and equally powerful message on the philosophy of debt, check out Michael Mihalik’s Debt Is Slavery.  For tried-and-true detailed steps on dealing with creditors yourself as opposed to hiring a debt consolidation company, look at Harrine Freeman’s How to Get Out of Debt.
• Read blogs written by people getting out of debt.  If you’re in debt, you’re not alone.  No Credit Needed is one of the originals who has gotten out of debt and still blogs about debt reduction.  Paid Twice, Blogging Away Debt, Debt Hater — there are dozens, if not hundreds, of blogs written by people whose primary focus is getting out of debt.  Learn from them.  Connect with them.  Interact with them!  Check out the Carnival of Debt Reduction to see what’s going on.
• Get support and encouragement as you get out of debt.  You don’t have to go through it alone.  Check out financial forums and contribute to the discussions.  Ask questions, ask for advice.  Or start a blog about your debt reduction as a way to solidify your resolve to get out of debt and to possibly make a little money in the process!
• Develop a plan for debt repayment.  Our situation is relatively easy: we just have a mortgage, so planning involves keeping up with the mortgage payments and evaluating whether to throw more at the mortgage.  If your situation is more complicated than this, check out this slick debt reduction calculator or get organized with something like the No Credit Needed Notebook.
• Be careful about stretching yourself too thin.  It is likely a good idea to have a small “emergency fund” built up as a buffer against taking on more debt.  If you’re starting with absolutely no savings and have debt, then it’s probably wise to trade off a little debt reduction for building up an emergency fund.  Once the emergency fund is built up, then it’s “safer” to throw more money at the debt reduction.
• Pay off the smallest card first?  Pay off the highest-interest card first?  For the most part, it doesn’t really matter.  As long as the balances continue to go down, they’ll eventually all go away.  Attacking the highest interest-rate loan first will mean less interest paid over the long run, but attacking the lowest-balance loan first gives the psychological satisfaction of “slaying a dragon” and might be exactly what’s needed.
• When raising money to reduce debt, grab the low-hanging fruit first.  Some expenses are easier to cut than others.  Holding a yard sale for things you haven’t used in years can raise money by getting rid of things you probably forgot you had.  Other things that you’re not using, like 500 TV channels in foreign languages, might not be missed either.  Downsizing or simplifying can be fairly painless, too, and help you to spend less than you earn so that you can reduce your debt.
• Build up speed.  The good news with debt reduction is that you regain some of your financial muscle each time you pay off a loan.  That’s a payment you don’t have to make anymore.  Flex that extra muscle and throw that payment at the next debt in line, and it will go away faster.
• Celebrate your progress.  Just like getting into debt (usually) doesn’t happen overnight, getting out of debt doesn’t happen overnight, either.  It can take years, and celebrating along the way (say, for every $1,000 down or for each credit card paid off) reward yourself with something nice.

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But you are still making money, hopefully.  Having a job or a source of income is more important than having a good return on investment.  You can always make more money, but to do that, weelllllllll … you need to make more money!

Protecting your job is crucial.  Developing more sources of income is also crucial.  Your financial situation can go downhill quickly if you stop making money, and it can go uphill only if you continue to make money.  Here are some suggestions for keeping your personal printing press up and running:

• Don’t do something stupid at work.  If your workplace has Internet policies, follow them.  These kinds of infractions are trivial to catch.  Hopefully it goes without saying that you don’t defraud your workplace of materials or misrepresent your time card.  Basically avoid doing the dumb things that will get you fired even if we weren’t in a recession.
• Look for ways to get off the short list of people to be let go.  Just like if you’re hiking with a group, and a bear finds your group, you only need to run faster than the slowest runner in the group to avoid being mauled.  Don’t be the slowest runner.  Find ways to get off the short list like taking on extra responsibilities or reminding your supervisor what you bring to the table so that it’s fresh in her mind.  (Gary North has had a number of very smart ideas in his members’ section for impressing one’s employer.)
• Take overtime if this is in the cards.  If your employment arrangement compensates for overtime, and you can do it, this adds to your emergency fund or increases the amount you can use to pay off debt.  If you’re salaried, putting in overtime gives your employer one more reason to keep you off of the short list for being fired.
• Take a second job?  A second job does mean another paycheck, but taking another job isn’t the best option for everyone.  Taking another job does bring in more money right from the start, but if you are fairly secure with your current job, starting a business has a higher potential for growth.  Consider both getting another job or starting a business.
• If you decide to take a second job, consider all the costs.  How far do you need to drive?  How much does that cost?  Do you need extra child care?  A second job will do you very little good if it costs you more than you bring in.
• If you or your spouse decides to go back to work outside home, consider all the costs.  What will be the cost of day-care if you have kids?  Would you be able to do as many of the little money-saving things if you or your spouse had a job?  Two incomes will do you very little good if it costs more than it brings in.
• Start a side business?  A side business has the potential to replace and exceed a job’s income.  But, as H. Jackson Brown said in Life’s Little Instruction Book, overnight success takes about fifteen years.  If you feel you need the extra money right now, a second job or overtime at your current job is a better bet.  Consider both getting another job or starting a business.
• If you decide to start a side business, consider putting time into it initially rather than a lot of money.  “Business opportunity” magazines are more than happy to sell you a $10,000 vending machine package but it’s quite easy to start up a business with almost no financial outlay.  If you want to begin blogging as a second source of income, You can get functional, professional web hosting for $6.95 per month with an included domain name (or you can register that one separately at GoDaddy.com, which is probably smart).  That’s about $8 per month, and the rest of the needed scripts can be obtained free.  Then, just add your time and effort!  This way is prudent in times of downturn.
• Check your tax withholding.  This is a smaller fix but by adjusting your federal tax withholding you can keep more of your money throughout the year and get less of a refund the following spring.  Just check the rules so that you don’t have too little withheld and end up paying penalties.
• Take advantage of your job’s benefits.  A health savings account?  401(k)?  Gym membership?  Subsidized meals?  Subsidized transportation?  Education reimbursement?  Your salary might be just part of your “pay” so check to see that you’re using everything that your employer offers that makes sense.

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Doing these little money-saving things takes time.  Time that might have been “free” or at least discretionary.  It’s always a good time to be frugal and to save money, but with the economy officially in recession now — unofficially in recession for months now — it’s crucial to save for a rainy day, because if it’s not raining now, storms clouds are just over the horizon.  It’s time to revive the (possibly) lost art of frugality.

Since we’re coming fresh off of Halloween, here are thirteen of those little money-saving things that you can do to lessen the pain during these trying times:

• Pack your lunch and snacks.  This is a tried-and-true money-saver.  It needn’t be a huge time commitment: five to ten minutes in the morning or the night before to put together a good lunch to take.  A half-hour a week to save, say, $4 per weekday by not heading out to the sub shop, or over to the vending machine, works out to $20 per week, or $40 per hour.
• Brew your own coffee.  I drink a lot of coffee, so this is a big money-saver for me.  I don’t save even as much as I could.  At work we have a coffee club that’s $2 per month for as much as I can drink.  Besides that, though, I can fill up Green Stanley about four or five times for what one cup of coffee would cost from a coffee shop. 
• Clip coupons.  As in with a pair or scissors and the weekend paper.  Or you can join MyPoints or CoolSavings.com to print out coupons online.  The tricks here: 1) Check to see that the item with the coupon is less than a comparable generic brand; 2) use the coupon on the size that minimizes the unit cost unless you need a lot of the item; 3) use coupons only for things that you’d buy anyway!
• Eat in rather than dine out.  It’s fun to troll Restaurant.com for restaurants that use their coupons but even with this discount it’s far more frugal to prepare dinner at home.  Expenses for dining out add up quickly.
• Combine errands to save gas.  Using a good gas credit card can shave off a dime or more per gallon, but combining little trips into one big one makes that tankful of gas go further.  Pulling this off requires planning.
• Weigh the cost of a wholesale club.  Buying more at a lower per-unit cost isn’t a bargain by itself; you have to use what you buy before it goes bad.  Wholesale clubs like Costco, BJ’s, and Sam’s Club let you buy in larger quantities than are typically available in retail stores.  Be sure to compare prices, as there isn’t one store that always has the lowest price on a particular item.
• Repair and make do rather than discard and buy new.  Over the few years we’ve lived in our current house I’ve revived some of our appliances when it made sense; www.RepairClinic.com is a favorite site for tracking down tough replacement parts.  Electronics are a bit harder to repair, unfortunately. 
• Buy larger quantities and make your own snack sizes.  Most of the cost in “100-calorie” sizes is in the packaging.  The bigger packages of trail mix, pretzels, peanuts, whatever, are required to have calories per serving on the label, so you can make your own.  This requires only a small amount of planning.
• Substitute less expensive foods.  You can get more carrot for your buck by buying the full-size ones as opposed to the baby carrots.  The right combination of vegetables can deliver the same proteins as meat.  And don’t forget to try out the generic brands to see if they’re comparable to the name brands.
• Entertain low-cost or free.  A trip to the library or a walk around the park are free (aside from time and gas).  A potluck (or “pot blessing” as our church calls them) are cheaper than a catered get-together.
• Buy used whenever it makes sense.  This is my very, very best money-saving tip.  Especially with vehicles.  We haven’t bought a new vehicle yet.  We bought a scratch and dent dryer and just got a used dishwasher from a friend who was cleaning out his garage for things to sell.  (Ours is intermittent now.)
• Spend time at yard sales, thrift stores, and flea markets.  Place a little more weight on “new to your children” rather than “new” when buying toys or other things.
• Substitute reusable for disposable.  We just let a colleague try out some of the cloth diapers we used with our daughter, and she likes them a lot.  Cloth diapers are cheaper in the long run, and getting used to cleaning them isn’t horrible.  Their resale value, surprisingly, is quite good!  Handkerchiefs are another money-saver; Trent embraces this one so it’s probably not something to just blow off.  Sturdier plastic containers are better than plastic bags in this regard, too.

I just know there are lots more little money-saving things that can make a big difference.  Have you got any?

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