I think it is safe to say that everyone is feeling the pinch right now, and, unfortunately, as the value of the dollar continues to decline, inflation will rise. It has to. The relationship between the two is an inversely proportionate one.

The good news is that Americans do know how to tighten the belt when they have to. Consumer spending figures indicate that we have cut back on pretty much everything across the board. So, we know we can when we have to, but what do we do when this mess is over? Do we go right back to excesses of the past?

Or will we?...

• Stop debting
• Stop our reckless spending
• Pay ourselves and invest cautiously
• And make judicious financial lifestyle changes?

The best money saving tip of all time is this: Don't be a debter. I could not be more serious about this. If you can master this one, it will be, hands down, your best savings tool. Ever. Period.

That means don't finance anything or leverage anything. That includes your house, your car and your first born. If you have to put it on a credit card, or borrow against it, then it isn't a good idea.

If you are carrying tons of credit card debt, then you are not alone. According to the Federal Reserve, the level of credit card debt in the average US househould is between 5% and 12% of their annual income. So, with the median household earning around $43,000 dollars annually, lets see what these consumers are paying on their credit card debt. A family with a $5,000 credit card balance with a 16% APR who makes a $125 payment each month would need 4.8 years and $2,000 in interest to pay off the balance.

Don't believe me? Let's try a simple experiment. Let's amortize a single dollar bill over 30 years at a 5% interest rate. And if you're not familiar with the the term 'amortization,' don't panic. It's just a word that means to gradually pay off a debt with periodic payments of principal and interest. Simple, right? It's how money lending works. Okay, here goes:

Loan Information Payment Calculations

Loan Amount: $1.00            Total Number of Payments: 360

Interest Rate: 5.0%              Total Interest Paid by End of the Loan $0.93

Loan Term: 30-year

Look at the last line in the second column. That means it cost you almost a dollar to borrow the dollar. Now, let's take that a bit further. What if you borrowed $100,000? Then it would cost you roughly $93,000 to borrow the money. So, if you purchased a home for $100K on those terms, the home would end up costing you almost double what you thought you paid for it.

You're a believer now, right? Good. Now what you need to do is sharpen your pencil because you need to run an interest calculation on everything you presently finance. Find all of your most recent credit card statements and your mortgage statement, then hit this link:

http://www.amortization-calc.com/

Fill in the balance, the interest rate, and the number of years you plan to pay it off in (start with 5 years- except the mortgage, of course) and it will return cost calculations to you on the right hand side.

List each of them down on your sheet of paper that way, then add up the interest. Scary, isn't it?

By now it should be obvious what needs to be done here: Stop using them and start paying them off. 1. Transfer as much of the high interest rate debt to lower rate cards as you can (without incurring penalties). 2. Continue to make minimum payments on all cards except highest rate card which you will make the minimum payment plus as much extra as you comfortably can each month until it is paid off. Once that one is paid off, start on the next. It can be done. Believe me, I know.

At this point, most households are hemorrhaging money.

Inflation is high, and still climbing, and incomes are static.

All of this is worsened by the fact that during the real-estate-bubble-excesses, all but the most practical homeowners took out a Home Equity Line of Credit (HELOC) against their homes and began spending against the equity in their homes like drunken sailors. Basically, they were using their homes, their greatest asset, like gigantic ATM machines. They were buying fancy vehicles, fancy vacations, fancy clothes, fancy everything, and like some kind of financial game of musical chairs, suddenly the music stopped, leaving many people owing more on their homes than they are worth. And there is no relief in sight.

This next part of the plan doesn't require a mental logic leap as much as it does steely pragmatism.

Here is the second part of the plan: Slow down on the spending! And buy to last.

Buy what you need, certainly, but when you do, buy well and then take care of it. Don't get caught up in buying cheap tennis shoes because they are three dollars cheaper. Look for a good quality shoe (house, car, suit, whatever) that's on sale, pay cash, and take care of it.

Price shop on everything: I recently saved almost $500 on a set of 4 comparable car tires just by taking the time to research and shop. I got a better warranty too. I know what you're thinking, but, no, I didn't have to haggle. That is something I find distasteful. It was just a matter of research, and it was well worth the effort!

Now I know there is a bit of wisdom out there that suggests that wise people use other people's money to make money. But, unless you are Warren Buffet, I would avoid these kinds of shenanigans like the plague. Let's face it. Most of us can barely balance our check books, much less have the financial savvy it takes to engage in that kind of financial wizardry.

Instead, let's try some more sound financial advice. We all remember the story of the Tortoise and the Hare, one of Aesop's fables, Right? Well, that needs to be our plan here as well: Slow and Steady wins the race.

The next part of your money savings plan should include a payment to your savings each month. The amount should be a percentage (not less than 10 percent) of the amount you have left each month after your bills are paid. This amount should be considered inviolate --- it should not be touched. Ever. For any reason. It should be invested in something non-agressive and safe. Let your 401(K) managers get tricky with the portfolio funds management. This money needs to be safe. No games, no pyramids, no gimmicky-get-rich-quick stuff. A decent-earning, high-rated, nice, safe, CD sounds good, doesn't it?

Have you ever known someone who has gone on some kind of crash-course-gimmicky-diet and lost a ton of weight? I have. And they looked great. For awhile. The problem is that unless one learns a whole new way of approaching diet and lifestyle, their weight goes right back on. It's an up and down, back and forth kind of thing.

That's the lesson we need to learn here. Healthy finances are created and maintained by developing a life style that is conducive to that.

Make lifestyle changes. Evaluate your expenses carefully. Where is your money going? Do you see an area where you can cut back and still maintain your quality of life?

Try eating at home instead of going out as often. Your wallet and your waistline will thank you.

Trim your household budget by making your own household cleaners. Check out this hub for some clean and green help: Homemade Cleaners - Money Saving Tips for the Home  http://hubpages.com/_1ytxfrkov8shp/hub/Homemade-Cleaners-Money-Saving-Tips-for-the-House

Learn how to make small home repairs yourself. Here's one of my hubs that might help with that: Plumbing Repair - Things the Un-handy Homeowner Should Know http://hubpages.com/_1ytxfrkov8shp/hub/Survival-Plumbing-for-the-Un-Handy-Homeowner

Be creative. Consider cutting the pool service back to twice a month and doing alternating weeks yourself. How about washing the car yourself on alternating weeks? You will be surprised how quickly these little amounts add up when you annualize them!