Except for some rare exceptions, financial issues have often been at the heart of trouble.  Conquests, pillage, even religious revolts have at their core conflicts fueled by financial issues.  There have been, of course, happy notes.  This article wouldn’t be in English had not the Celtic king of northern England in A.D.449 asked help from his Jute friends (whose language evolved into our present English) to repulse invaders out for a land grab.

More than ever, financial concerns today make mincemeat of the American people.  A staggering S7 trillion in consumer and mortgage debt confronts the American people, and instead of improving, the situation seems to be getting worse. No longer are credit cards used to purchase a sinfully- priced Versace or a bottle of La Spinettared.  These days, groceries (gulp!), are being put on plastic. Yes, Virginia, groceries.

Which shouldn’t really be alarming;  after all, Americans have every intention of paying off debts.  The question is:  Are they in a position to?  This question is important, because as of today, it looks like they aren’t.  In 1993, the average American’s savings was already an anemic 5.9 percent of disposable income.  Ten years later, in 2003, it deteriorated to 1.3 percent.  It’s anybody’s guess what probably it is now.     

It is a matter of national security for the average American to regain his senses and stop shooting himself in one leg.  Here’s what he needs to do:

Keep Track of the Cash Flow

To be able to plug the hole, you have to know which pocket has the hole.  Write down all of your purchases and expenses every day for the next one or two weeks.  You might be surprised at the patterns that might emerge: you’re paying for magazine subscriptions and club memberships you hardly read or use;  you buy your groceries using a list, but you invariably have a high-priced item or two that you never intended to buy;  you have a soft heart for signature clothes when a JC Penney would do.  Try removing the fat out of your usual shopping routine, and be absolutely amazed at what this simple measure can do.

Pay in Cash, With Ben Franklins

Three hundred dollars paid using your credit card is every bit money as three crisp Ben Franklins. The curious thing is that, while people hesitate parting with their Ben Franklins, they don’t hesitate swiping their credit cards. To stanch your financial hemorrhage, pay only in bills. Better still, bring Ben Franklins, not Jacksons. That way, you’d have a lot of thinking coming before you decide to break a hundred bill for an absolutely gorgeous live lobster.

Don’t Get Into Fresh Debt to Get Out of Old Debt

Leave the juggling to the circus jugglers, in other words. Your objective is to get out of a vicious circle, not get into a new one. Hard to do? Maybe. But not impossible. See below.

Carve Out With Your Bare Hands a Budget

Aside from supernatural help, only a budget can help you now. The idea is to put a lid on expenses – stanch the flow of blood – yours, to allow your income to catch up. Catching up is just the beginning. You still have to accumulate substantial savings. You will have to bite the bullet, but there’s not much options open to you.

A budget is nothing more complicated than a plan to match your income with your expenses. Here’s how you can go about it:

· Know thyself. It might help if you know a bit more about yourself, especially where you stand in regard to risk-taking. One way to do this online is to do the financial checkup on the Intuit Corporation Web site at www.quicken.com.

· Know your financial position: you current level of wealth or net worth; your cash flow (it’s not enough to know how much you earn and how much you spend, you also need to know the timing).

· Work on a plan for each of the following: income, obligations, necessities, non-necessities, savings, and debt, assigning to each item a dollar amount.

· Stick to your budget.

Getting out of debt is every bit as difficult as getting out of bed on a cold morning or kicking an alcohol or a drug habit, but success awaits the persistent. Of course, debt consolidation loans are always there to extend relief, way better than to file a Chapter 13 or Chapter 7 bankruptcy, and all you have to do is do some pencil pushing using a debt consolidation loan calculator. But why wait till you come to that point? You can get out of debt—it’s all up to you.