Every day somebody suggests an even more tempting recipe for borrowing your way out of debt, sort of like the cheesecake-of-choice for those on a diet.
Can't make ends meet? Reduce your monthly mortgage payment and try our interest-only mortgage.
Cash in seconds. Don't let financial debts control you and your family. Take charge.
Or charge it.
Again and again.
The basic bottom line is that refinancing your troubles, much like the cheesecake, often rolls you right back into the same sinkhole where you started.
One cannot stay out of debt until one learns to spend less than he or she makes.
Calculate cost of living
First step, find out what your lifestyle costs you.
If you must pay $250 a month to cover just the minimum payments on your credit card debt, admit it now and budget that expense up front.
You cannot figure out how to pay down any debt without first figuring out your expenses.
"It sounds simple but it isn't," said Marilyn Capelli Dimitroff, president of Capelli Financial Services in Bloomfield Hills, Mich.
Go through all your expenses monthly mortgage or rent, lease or car payments, charge card payments, food, dinners out, student loans, cable bills, phone bills, gas and electric bills, child care, oil changes, clothes, holiday gifts, season tickets and figure out what you are spending.
If your idea of managing cash flow is another run to the ATM, chances are good you have no idea what you're spending. Maybe you should write down your cash purchases for a month or two.
And do not forget the once-a-year payments for home owner's insurance. Or twice-a-year payments for car insurance.
Dimitroff suggests budgeting for the big-but-predictable costs by calculating the expense on a monthly basis. If car insurance costs $1,200 a year, set aside $100 a month in an interest-bearing checking account. That way, you're ready to pay the bill.
And if your expenses exceed your income?
If you have a chunk of credit card debt, you're probably spending more than you make.
How to cut back
So take a pass on the cheesecake and figure out what you're going to stop buying. Or what you're going to sell. Sometimes, it takes unloading a boat, second car or a second home to cut down on extra expenses.
Scramble some eggs. The big, black hole in many family budgets is food.
Steve Rhode, president and cofounder of Myvesta.org, which offers debt counseling via the Internet, said the organization had one client in New York City who made $100,000 a year but had about $50,000 in credit card debt. She spent $1,000 a month eating out with friends.
And if you eat at home, skip the Martha Stewart recipes. Making a dinner of chicken paillards with prosciutto and figs sounds divine. But have you priced prosciutto? It's $17.99 a pound. Even 10 thin slices will cost you five bucks.
Simple meals are wonderful for the soul and the savings.
Even Martha admitted on television that she's eaten eggs for dinner.
Quit trying to be Carrie or Oprah.
You can save a ton of money if you stop dressing the part of love-seeking Carrie Bradshaw on HBO's "Sex and the City."
Too often, our self-worth is based on Prada skirts, leather loveseats or diamond earrings.
But "the key to financial happiness is spending less than you earn," Marc Eisensen, coauthor of "Invest in Yourself: Six Secrets to a Rich Life."
Don't think refinancing your mortgage eliminates debt.
On paper, refinancing a mortgage sounds great. You use equity in the home, pay off some credit card bills and pay off your debts at a much lower rate. Why pay 18 percent for credit cards when you can pay 7 percent on a mortgage?
Yet will you pay off the debt quickly? And how are you using that savings?
"It sounds like a great idea but you're turning equity into a trip or Christmas presents," Dimitroff said.
And refinancing isn't free. Some lenders charge outrageous fees and rates to debt-troubled borrowers.
Pay more than the minimum monthly payment on your credit card debt.
One sure-fire way for staying in debt is to make only the minimum payments. If you do that, things can get "terribly out of hand," said Mike Cortez, a nurse who lives in White Lake Township.
Cortez, 46, now owes several thousand dollars on his credit card and is looking at taking out an interest-only mortgage plus a $30,000 home equity loan to pay down some credit cards.
Cortez was out of work for a year and kept up his spending by using credit cards. But now he's looking at four credit cards that have rates of 29 percent.
"It's getting so ridiculous," he said. He recently paid $160 on one Visa bill, and $148 went to cover the interest.
How do you attack the bills?
Make a list of the minimum monthly payments. Then pay an extra $20, $30 or $40 a month toward one bill.
Say you owe $7,500 on your credit cards. It would take you 37 years to pay off that debt if you made only the minimum monthly payment. And you'd end up paying $19,456, says Nancy Castleman, a expert on debt and partner of Goodadvicepress.com.
But if you pay an extra $25 a month, on top of the minimum payment, you'd pay off the debt in a little more than 13 years. And you'd pay $13,471. Her example assumes a 15-percent rate on your credit cards.
Psychologically, it might be tempting to aim to pay off the card with the smallest balance, no matter what the rate.
But financially, your best bet is to attack the card that charges you the most to keep a balance.
The quicker you cut down on high-rate debt, the more money you'll save in the long run.
And if you start out paying $200 a month toward your credit cards, keep paying $200 a month or more, even though the balances and the minimum monthly payments will drop. The more you pay, the faster you'll be out of debt.
Oh yeah, stop using plastic.
Put your credit cards in the freezer. Give them to your grandfather. Do whatever it takes to stop pulling out a charge card to buy what you want.
Pay all your bills on time.
If you're deep in debt, the last thing you want to do when you get a bill is to open it up. It's much easier to push it aside and hope it will go away.
But late bills can hurt you dramatically when it comes to getting a mortgage or a good deal on a loan in the future. Your FICO credit score the number some lenders use to determine if you're a good risk uses your bill-paying track record as a key factor.
And late payments could raise your costs, Castleman said.
"Credit card issuers can hike your rate significantly," she said.
Take a deal on a First USA Platinum Visa. The introductory rate for six months is 0 percent. If you are late once in that introductory period, the rate bumps up to 13.99 percent.
Late twice in any six-month period? You're looking at a higher-than-average rate of 19.99 percent. And you've got a $29 late fee.
Tell somebody the truth.
Money counselors say you need to admit you've not handled your money well.
"When we hold secrets, secrets shame us," said Dick Boyum, a counseling psychologist at the University of Wisconsin-Eau Claire.
Hiding from the guilt might drive you to spend even more.
"Tell people your truth," Boyum said.
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