The Easy Way Isn't Always Easy

Online, February 11, 2011 (Newswire.com) - Your financial path is littered with alluring options like credit cards, cash loans, reverse mortgages and 401(k) raids. The economy is starting to look stronger, but the employment rate is still fairly high, currently at 9.7 percent. Many families are skipping contributions to savings or retirement funds just to keep up with bills.

When treading waters like these, it can be difficult to keep your head up high enough to allow you to breathe. But don't compound your problems by making these common mistakes.

• Stay away from your 401(k). Don't dip into it even if you can't figure out a way to pay your bills. It's particularly foolish to dip into a 401(k) if you're in danger of bankruptcy, since retirement accounts are protected under bankruptcy laws in most states. You won't have to surrender your retirement savings to get a fresh start. If you dip into it as a temporary fix now, you may find yourself broke now and in the future.

• Don't walk out on your mortgage. This isn't your only option, providing you still have an income. If the situation is short-term, meaning you can see a way to keep making the payment, then stick with it. If the problem is long-term, then the fact of the matter is that you can no longer afford your home. The sooner you realize this and make plans to sell it, the better.

• Don't ignore your credit card balance. Credit card usage is down, however, many families still owe more than 40 percent of the income. Don't just pay the minimum on your balance; pay as much as you can and pay the card off as soon as possible.

• Don't fall victim to those debt consolidation firms. Many of them are scams.

• Be cautious about cash loans. These type of personal loans are a short-term loan in order to meet emergency expenses between paychecks - it's not meant to be a long-term financial solution. To find

• Be leery of reverse mortgages. These mortgages often carry fees and other costs that can be considerably higher than other loans. Instead of this type of loan, take out a home equity loan, or sell your home and move to a smaller, less expensive one.

The bottom line is this: don't look for the easy way out. It takes time to get yourself into trouble financially, and it will take time to get yourself out. Take the time to do things right.