The 5 financial tips for the 3rd week of August 2012 are given below.

Tip no 1 - When you want to buy something, ask yourself "Do I need it?"

You'll see a variety of items in a store. Some items will grab your attention instantly. You'll be tempted to purchase them by any means. However, before whipping your credit cards or taking out your wallet, think whether or not you actually need those items. If you just like an item but don't need it, then shift your attention to other sections of the store. If you won't be using the item at all, then what's point in buying it? It will be a sheer waste of money. You can use your money to purchase those items which you or your family actually needs.

Tip no 2 - Instead of depending on standard deductions, itemize your tax file to cut down on the amount of tax you pay.

This tip can potentially help you save a substantial amount on your taxes. In itemized tax deductions, you create a list of items and calculate the total amount you spend upon them. Once it is done, you can subtract that amount from your adjusted gross income. Federal government will have a look at the residual amount and determine your taxable income.

Some of the expenditures which can be itemized are mortgage payments, donations to charitable organizations, medical expenditures (provided they surpass 7.5% of your income), property taxes, local and state taxes, un-reimbursed employee expenses, etc.

Tip no 3 - Keep only one credit card for emergency purpose and cancel all other cards you have.

Most of the people will suggest you to cancel all your credit cards when you're suffering from debt depression. You will get similar suggestions from different financial websites too. However, keep it in mind that canceling all your credit cards is not a wise idea. You should at least retain one credit card of yours. This card will be useful during financial emergencies. If you car's rear end gets damaged due to a hit and run case, then you can use the credit card to repair it. If your child gets injured and needs to undergo an operation, then you can use the credit card to pay the medical bill. You may not have enough funds in your bank account all the time.

Tip no 4 - Try to pay off the credit card balance on time in order to avoid huge interest rate.

Credit card is your friend. It helps you fulfill all your desires and wishes in life. However, keep it in mind that if you don't pay off the credit card balance on time, then your life will soon face a financial storm. The same credit card will turn into your foe. You'll be charged an impossibly high interest rate on the credit card. This is not all. The credit card company will impose late fees too.

Remember the last date of making the bill payment. You can see the last date on the bill itself. Pay the bill within that date. You can even set up an automated system in your bank.

Tip no 5 - Formulate a well-planned budget by considering your income and expenses so that you can save at least 10% of your income every month.

Financial experts say that you need to save at least 10% of your income every month to create an emergency fund. So, plan a budget which will enable you save minimum 10% of your wage every month. List your expenses one by one. See, where you're spending money every month. Cut down on your unnecessary expenses. For instance, skip costly vacations and stop purchasing branded goods. Look at the other areas where you can potentially save money. Your first step will be to reduce the electricity and water bills. You can do that by using the electrical appliances consciously.