Personal Finance Buzz

The best way to get out of debt if you’re in college is to stop accumulating more debt. And the best way to do that is to cut your expenses. The last thing you want to do is to graduate college with debt. This will make it tough to maintain a high credit score or even obtain credit sometimes. If you take these steps, you’ll have more money to pay off your existing debt and you’ll accumulate a lot less debt going forward.

Even in a healthy economy, no job is completely secure. A mortgage is a long-term financial commitment that relies on a steady income to maintain. If you lost your job, could you continue paying your mortgage every month? If not, you need unemployment mortgage insurance.

With unemployment rising to 5.5%, more Americans are finding themselves with more time to catch up on their daytime TV or put in some serious time on World of Warcraft. Others see unemployment as an opportunity to begin a new career, take a mini retirement, invest in yourself, or find other sources of income.

As you consider your money decisions, realize that there are some debt traps that can keep you in a cycle of living paycheck to paycheck, and not having much disposable income or time. Here are 5 debt traps to avoid.

If you suddenly lose a large portion of your income, or if you end up with a large, unexpected expense, you may not have the cash on hand to solve your problem. Head off these problems so borrowing isn't your only option.

A common fear of joining a debt settlement or debt reduction program is wage garnishment. While garnishment is a real threat, it is typically the very last resort of a creditor—meaning they’ll do everything they can to avoid taking an account legal.

However rare, it’s good to know how it works so that you can protect yourself and avoid it altogether.