Know your financial limits

The Financial Times recently reported that U.S. banks are set to earn $38.5 billion this year from overdraft fees alone, more than double the number from 1994. If you don't know how much is in your bank account, you could easily withdraw or spend beyond your limit or have a check clear that takes your balance below zero. When that happens, banks charge anywhere from $5-$10 in overdraft fees. And that's not all. If you fail to pay back the amount you've overdrawn, you could be hit with even more fees after a set number of days in the form of a large sum (as high as $35) or a daily tariff (often between $5-$10). According to the National Consumer Law Center, the average overdraft fee is $34.65, and considering a purchase as small as your morning latte could put your account in the red, that's a hefty price tag.

Credit cards fare no better, with late payment fees increasing as well as charges for going over your limit. According to a survey done by the Pew Safe Credit Cards Project in March 2009, 92% of credit cards had a fee for exceeding the credit limit, including 100% of student cards. The over-the-limit fee and the late payment fee were both $39 for most accounts. Also, these infringements can result in your interest rate skyrocketing up to 30% or higher. In fact, that same survey found that 93% of cards allow the issuer to raise any interest rate at any time. And once that rate goes up, it is unlikely to come down.

Ignorance is not a bliss

The worst culprit for keeping you in debt is not knowing where your money is going. Make it a priority to keep records of where and how you spend your hard-earned cash. Make a repayment plan and have set goal-dates for paying off debts. Without these tools, it's far too easy to stay in debt. You can purchase accounting software, make a simple (and free) spreadsheet on your computer or even work it out with a pen and paper; just make sure you make a long-term plan for regaining control of your finances.

Debt may seem like a life sentence, but it doesn't have to be. The number one tip for maintaining financial health is awareness. Be aware of your money and where it goes each month, and be aware of the options available to you. There are easy ways to help alleviate the stress on your finances and move from red to black, and the rewards are more than just monetary.

Pay Credit Card Bills Soon After They Arrive

Credit card companies will take as many as three days to log your payment, so your best bet is to pay soon after receiving your bill if you have the money in your account and can pay the balance in full. If you miss the closing date, you'll be charged the larger of a late fee (often $20) AND interest on the old and new balance.

Buying a timeshare? You got to be kidding

Few years ago, a friend went to an invitation to a timeshare demo "just to see." He and his wife were going to just say no and enjoy the free vacation the company promised. But about halfway through the presentation, he changed his mind and ended up purchasing it. He convinced himself and his wife that it was okay because it provided points that they could use anywhere. Turns out, points aren't that great; they could afford the air tickets to go to the resorts.

He paid for three years of maintenance fees before he decided he had enough. Since timeshares are so hard to get rid of, he decided signing it right back over to the resort for $0 would probably be the cheapest route. He was happy to get rid of it, but before it cost him $8,000, which could have paid for some nice vacations!

Don't Mix Siblings with Money

A friend wrote, few years ago she tried to save his brother from financial failure. He owned a car that was about to be repossessed. She decided to pay off his car with her personal loan account with the guarantee that he would make the monthly payments.

The original $18,000 loan is now up to $27,000 with cash advances and interest! Her brother made a few token payments at first, but that was not enough to even offset the cash he had advanced him. Her brother has not talked to her in two years.

The lesson learned is that repossessed is okay, and if she had allowed it, she would still have a brother and most important no personal debt. She will never again loan money to anyone again.

Bad credit can affect your job prospect

You've networked your way into a job interview. Your background is perfect and your references are impeccable. An offer may be coming. Then the hiring manager says they just need to do one more thing: run a credit check.

Depending on the kind of position you're looking for, a high credit-card balance and a few late payments -- which may have happened because you've been out of work -- now threaten your chances of receiving a job offer.

Forty-two percent of employers, including the U.S. government, run credit checks on job candidates, according to a 2006 survey by the Society for Human Resource Management. Most often credit checks are due diligence on potential employees who would have some contact with money, from CFO to clerk.

To Buy Stuff While Still In Debt

It's recommended that you wait. Sometimes things are necessities and you must buy. However, most things are not. If you want to purchase sport rims, you should wait until you pay off all your debts. Sport rims are not something you need. Being out of debt so that your family can live and save is more important than buying the sport rims. Try look at priorities. As long as you have what you need to physically survive, very few things are more important than getting out of debt as quickly as possible.

Sometimes people borrow money to pay off debt, and they just go deeper and deeper into debt. When you have more money going out than there is coming in, you are simply borrowing to pay your bills.