For instance:

Debt used to be a very basic part of my life. It was not just a tool I could use to live beyond our immediate needs, it was practically a lifestyle choice. The amount of money people (people meaning banks, credit cards, etc) would lend me to finance my future was a very real consideration in all the choices I made in the here and now.

But through this debt reduction and ultimately elimination journey, at some point I made a very real, concrete change in my brain. Although I am not strictly anti-debt, I don’t believe in debt any more as a fundamental part of my life. I don’t put my faith in the financing of others to create the life that I want to live.

That’s how my grandpa felt about the subject. When it comes to our modern day approach to money, a lot has changed in this country in a very short period of time. And it’s pretty clear the Depression era attitude towards debt is the healthier one, especially in terms of an individual’s debt or a family’s debt. I do think businesses sometimes need to take on debt in order to grow.

When you write down what you spend and what you eat, it’s easier to see when and where over-spending and over-eating occur. It also provides accountability when you know later that you’re going to have to write it all down.

She says she uses the free web service Wesabe to keep track of her spending. I poked around their site and it looks like a great tool.

Wesabe combines easy-to-use budgeting tools with a thriving community of smart, supportive people, anonymously sharing ideas and advice with each other to help everyone get more value for their money.

According to ArsTechnica, Wesabe members can automatically import transactions from over 6,000 banks and credit cards (loans and investments are not yet trackable), though users can also manually upload a handful of financial industry file types such as OFX and QIF.

Perhaps you have been or will be one in four Americans who are lucky enough to receive one of these bequests. If so, here are a few suggestions on how you can use your inheritance.

Consider these facts:

• Average inheritances range from $10,000 to $50,000

• 85% of inheritances are gone within 5 years

• Inheritances are most commonly spent on:

1. Cars
2. Vacations
3. Bigger homes
4. College Education
5. Starting a Business

While a small windfall may prompt you to spend it all at once, try to consider the thoughts and feelings of the person who left you with your inheritance. They may have saved that money for years just so you would have some comfort in your life.

It’s Your Debt – Take Care Of It

Getting out of debt is an admirable goal, however this too deserves careful consideration when using inherited money. Financial planners looking simply at the raw numbers would certainly recommend this strategy especially given the high cost of some debt, such as credit card interest ranging from 19% to a truly unconscionable 30%.

Did this generous person leave you this money to pay off your daily lattes, the cute sundress you couldn’t resist, all those great dinners at restaurants you wanted to try, the fun weekend trips, the wide screen television, the timeshare you thought was such a bargain, the collection of top shelf vodka for your martini bar? I doubt it! You wanted these things and that’s great if you can afford them. If instead, they were charged because you couldn’t really afford them, the bill is now due and the price is 19-30% higher than when they were purchased. It seems prudent to realize it was not your benefactor’s intent to buy you these things. This type of debt should be paid with your own earned income and not your inheritance.

Education Is Money

Paying off debt for education is another consideration. Your benefactor most likely wanted you to be well educated and able to take care of yourself and your family. If you have student loans or current college expenses for yourself or your children, using your inheritance for this debt might make your parents or grandparents smile.

Slow and Steady

Paying off your home mortgage is usually not the best option. Mortgage interest rates are historically low and are tax deductible. Unless you are close to retirement and cannot make the payments from earnings, putting the money to work for you to generate an income stream is often a better option.

Stay Away from Stocks

Unless you’re a professional with considerable experience, dabbling in stocks with your inheritance is foolhardy.

Fund Your Retirement

Funding your retirement through your 401K, a Roth or traditional IRA would be excellent options. If you own a small business, a SIMPLE IRA can easily be set up at Vanguard or Fidelity and $11,500 per year can be placed in a tax-deferred account for your golden years. Choose a well-diversified portfolio of index funds to reduce your risk and maximize your return, keeping fees to a bare minimum.

Pass It On

If you have children, consider helping them as your parents and grandparents helped you. Perhaps a 529 plan for college, a down payment for their first home, paying off their student loans to help them get out from under a debt load, or helping them fund their retirement accounts would be a fitting tribute.

Take Your Time

Where, when and how to spend an inheritance is a much bigger decision than just buying a new car or paying off your credit cards. Put the money somewhere safe, in an FDIC insured bank account or in CDs, and think through your life goals and the wisdom and values your benefactor tried to share with you during his or her lifetime. Take your time and do something with the money that would make your benefactor (and you) proud.

Also, consider investing in professional advice from a fee-only certified financial planner.

1. Create a Cash Cushion. With unemployment at a 25-year high you need at least a six to nine month emergency fund to cover living expenses until landing a new job.

2. Pay Off Debt. With credit cards charging 18-30% interest this is the best return on your investment. Just don’t charge more.

3. Fund Your Retirement. Hopefully you’re employed and contributing the maximum to your 401K at work. With any excess, fund a Roth or traditional IRA. You can borrow for almost anything in life, however NO one will loan you money to retire.

4. Save for College. If your children are still young, investing in a 529 plan can earn returns large enough to keep up with rising college costs. Consider more conservative options like FDIC insured CD’s if your kids are within a few years of attending college and will need the money sooner.

5. Invest In Yourself. Competition is stiff. Whether you are unemployed or worried about being the next to lose your job, now is the time to freshen your resume, sharpen your interviewing skills and take an extra course or two to give yourself that extra edge. Perhaps invest in a career coach to help.

6. Splurge a Little. This is usually the first place people want to spend their tax refund. The other options might pay better dividends, but if you’ve covered your emergency fund and paid down your debt, a little splurge might be in order. Retails sales are excellent now and bargain-basement travel deals abound.

However, if you’re really serious about conquering your debt and using your money wisely, why would you give anyone, much less the federal government, an interest-free loan every year?

The average tax refund so far this year is $2,740 according to the latest IRS statistics. If you are getting a refund change your W-4 today. Keep more of your own money every month. And if you really want to loan Uncle Sam some of your money, buy I BONDS instead. The bonds, which pay a combined fix rate and an inflation rate, are paying 5.64% until the end of April. The two combined rates adjust every six months, but who thinks inflation is going down? Go to www.savingsbonds.gov to see if they are right for you.

Here is step 22, showing us once again that small changes can help big time.

Identify ways to reduce spending

To create a balanced budget or increase savings, most people will have to find a way to earn more or spend less. If the idea of spending less sounds challenging, try starting small.

It’s important to understand that every purchase we make—excluding such absolute necessities as food, rent, and gas for the car—is a choice. The America Saves coalition offers the following examples of how making some small changes can save you an impressive $150 per month.

That’s an extra $1800 in your pocket every year!

Click here to make the commitment to spend a little time each day this month improving your financial future. Remember, no one plans to fail, they simply fail to plan.

One of Smart Money’s warnings is be careful not to get sued.

Since debt-settlement companies instruct consumers to stop paying their bills while they’re saving for a settlement, their balances continue to swell with interest and late fees and their credit scores plummet. In order to get paid, creditors may even sue — and these days, companies do that some time in the second year of nonpayment. With most debt-settlement plans taking 36 months or longer to complete, the chances of getting sued are pretty high.

That’s a pretty serious warning, don’t you think?

Robby Birnbaum, an attorney and member of the board of directors of the Association of Settlement Companies estimates there are 600 to 800 such companies nationwide. With the economy the way it is that number is likely to go even higher.

AmEx Ain’t Havin’ It

American Express says it only works with debt-settlement companies when the company sends a “cease and desist” letter forbidding AmEx to contact the consumer.

“We really don’t think that there’s a service or benefit that a debt settlement company will offer our card members that they can’t receive directly from us,” says Desiree Fish, an AmEx spokeswoman.

Interest rates of 10.9% are increasing to 19.99% and up to 29.99%. Late fees are being imposed with any delay in your payment being posted. Over limit fees are further increasing your outstanding debt. The combination of fees can add hundreds of dollars to your balance and there is nothing you can do about it after the fact.

Never has there been a better time to swear off credit cards and pay down your debt than right now. Go ahead, pull them out and cut them into tiny plastic pieces. It might hurt a little but it’s the path to recovery.

Good Credit Isn’t Enough

No one is immune from being cancelled or having their terms changed. Card holders with impeccable credit who have never made a late payment and are not anywhere near their personal credit limit are having their rates doubled and in some cases tripled. Millions have had their accounts closed for lack of use after being good customers for years. Explaining and complaining seldom helps. Closed is closed according to the banks in most cases.

Here’s a story from my own life. I’ve been a customer of First National Bank of Omaha for 40 years with an almost perfect FICO score, never a late payment and no rollover balance. But they canceled my Visa card due to inactivity. The customer service representative I called was kind and patient yet insisted she could do nothing about it. Not one to give up a lifetime of credit history, I wrote to the bank president. His assistant called me a week later and offered to let me reapply and see if I qualified for a new card. Still miffed and not really needing the card, I agreed ONLY if they would reinstate my “member since” date to 1969. They did.

Help On The Way (But Self-Reliance Is Even Better)

Help is coming in July 2010 when sweeping changes to credit card rules take effect. Welcome relief from federal regulators and not a moment too soon for those drowning in credit card debt and vulnerable to these exorbitant fees. Credit card issuers will need to redesign, rebuild and re-price their offerings based on the largest crackdown on credit card companies in 30 years.

But that’s then and this is now. Whatever rules are in place, you need to understand how your credit card issuer assesses charges and penalties. This information can literally can save you hundreds of dollars. Watch the triggers closely to avoid getting trapped paying 29.99% on your outstanding balance. Transfer the balance to a lower cost card if necessary. Paying on time and doubling your payment will also help put you back on the financial straight and narrow.

I say this from experience, as I just recently uncovered a $15/month mystery fee on our AT&T Wireless bill. When I called AT&T customer service to find out what this recurring monthly charge was for, the Rep instantly made the charges go bye-bye. She said it looked like a scam that’s activated simply by opening a text. So be very careful not to open a text message if you don’t know who it’s from—doing so unfortunately exposes one to digital pick pockets.

Also, I might have missed that bogus line item if my account was on auto-pay. I know auto-pay makes quick work of a tedious chore, but it also makes it tempting to forget about your bill and the important details therein. However you pay your bills, it pays to read first and pay second.

Haggle — It’s For Your Own Good

Okay, you’ve properly inspected your bills and found the assessments to be legitimate, but not altogether pleasing. Take your local cable company, for instance. They’re making major bucks off of your media habits, I am right? We’re going to do something about it in our household. We’re going to move from Comcast to Clear, the new WiMax service available in our area.

But for the sake of argument, let’s say we liked Comcast and wanted to keep the services we have. Fine. But the monthly packages need to be reworked at once. A simple phone call to Comcast ought to be enough, for they don’t want to lose customers. Customers are expensive to acquire and thus crucial to hang on to.

Rich Like You suggests calling Comcast to cancel your services. When they ask why, tell them you’re taking AT&T up on their $20/month introductory offer for Internet (whether it’s available in your area or not).

It was painless, the whole process took <5 minutes. If you have not been on a promotional rate, then just tell them that with the economy that you need to reduce your monthly expenses and that internet is a luxury item for you. Tell them that some of their competitors are offering rates significantly lower, and some even at $20. They will give you a speech about the speeds and other nonsense, just tell them that the speeds are not important to you, and that you hardly use the Internet.

I doubt you will have any problems, but if you do can not get them to budge, ask them to set the cancellation out a few days and then call back and cancel the cancellation.

Bottom line, services of all kinds are negotiable. With cash in short supply today that’s only going to become more and more true. Look to barter where you can, and look to haggle where you can. If you’re successful at it, you’ll have more money to spend on the things that matter most to you.

Yesterday, we looked at some ways to boost income, today let’s discuss ways to cut expenses and Keep More of Your Hard Earned Money!

Here are a few options I’m pursuing to keep more of my money.

Plan a Staycation. See and do all the things you’ve always meant to do right around home and save a bundle on hotel bills and transportation. To make it more fun, plan each day as you would a destination vacation. Visit different restaurants, go to a game. have a picnic in the park, see the new exhibit at the art museum, see the free fireworks display, and so on. The point is to spend quality time with your family and friends.

Attend Local Gatherings. Scour the local newspaper—if your city still has one—to identify the festivals, church suppers and pancake breakfasts where you can enjoy meals out at a fraction of restaurant prices.

Cut Hidden Investment Expenses. Take a look at the expense ratio on each of the funds in your 401(K) and IRA and any other mutual fund investment accounts you might have. ndex funds are considerably less expensive than actively managed funds. See if there is a place in your portfolio to match the market rather than try to beat it and save that extra expense. On a $100,000 portfolio moving from a 1% fee ($1000 yr) to a .2% ($200 yr) could save you $800 a year.

Talk for FREE. Download Skype and talk to anyone in the world for absolutely free. It’s simple and if you have a camera built in or attached to your computer you can also see the person you’re calling. It’s almost as good as chatting with your best friend in person.

Cut the Crap Eliminating all but the most important features of your cellular plan. Ask yourself if your kids each really NEED a cell phone and unlimited text messaging? Does anyone really need 5000 minutes a month? That’s 83 hours! With fax machines almost obsolete, can you share your landline with your fax machine and give up that extra landline? Look at your bills and be honest about what you really need and make a few changes today.

Buy Generics. Many store brands are made by the major manufacturers and are equal to and in some cases better than the branded products.

Save Your 2¢. Postage increases again on May 11. Buy a supply of forever stamps now at 42¢ each. They will mail a 1-ounce letter after the price changes without the need for additional postage.

Trade Books, CDs and DVDs. Donate the books you don’t want and get the books you do want FREE. Textbooks too. This amazing website lists 3,167,264 books available. This is a MUST for every book lover. Swaptree is another site offering books, CD’s and DVD’s for trade.

Flash Back to the 50s. Wash your own car, mow your own lawn, polish your own fingernails, clean your own house, learn to iron, plant a few tomatoes and learn to cook a few great meals for your family and friends.

Cut Your Taxes. Pay your fair share and not a penny more. Keep a journal in the car and on your desk to record every possible deductible expense. Keep impeccable records and receipts with names and dates. Do everything you can to reduce your tax burden and keep more of your own money this year.

If you want different results, do something different. Saving money is a lot of fun once you make it a daily habit.

AnnualCreditReport.com is where. 

Anyone can dance a jig, but only AnnualCreditReport.com provides you with a truly free credit report.