Check out the 5 financial tips for the third week of August 2013.

Tip no 1: Embrace the pain of living without luxury items before the pain of staying with debt becomes too much.

It is not easy to live without the luxury items, especially when you're completely habituated with them. However, you need to endure this pain when debt has become an inseparable part of your life. Debts can ruin your mental peace and life. Harassing collection calls can be totally a nerve-racking experience. If you want to get rid of them, it's best that you start living without making useless expenses. You can curb down your expenses only when you start leading a frugal life.

It may be painful to give up all the luxury items and start living on just the bare minimums. Nonetheless, it is much better than living with debts.

Tip no 2: Forget about leading a debt free life without making a dramatic changes in your lifestyle. Spend only when it is absolutely necessary.

Nothing comes free. You've to work hard to achieve your dream. If your dream is to live a debt free life, then what you need to do is to make certain cuts in your lifestyle. For instance: you have to downsize your home. You may have to stop watching movie at the theaters. You may have to take a lot of other steps as well.

Do whatever it takes to lead a debt free life. If that means you've to create a budget and cut down your expenses, then so be it.

Tip no 3: Accept your financial mistakes in front of your spouse. This would help you avoid painful break-ups and divorce.

It doesn't feel great to disclose your financial mistakes to your spouse, and that too at the early stage of your relationship. However, it is absolutely necessary to do so. If you refuse to discuss about your financial mistakes and weakness with your spouse, then you're just inviting troubles in your life.

Strike a casual conversation with your love interest. Ask his/her opinion about money and debt. You can understand his/her financial personality after having a few words with him/her. If you get a feeling that financial issues can have an effect on your relationship, then it is better broach the dreaded subject immediately. It is better to have a frank and free discussion right now.

Tip no 4: A secured credit card helps you build credit without inviting debt troubles. If your credit is in bad shape, then take out a secured card.

A secured credit card helps you build credit gradually. You can use the card after depositing a certain amount against it. The money is used as the collateral against the card. The credit limit on the card will be determined as per your affordability.

You can use the card for various financial transactions. However, you've to make the monthly payments on the card. If you don't make the required payments, then the credit card company can retain the deposited amount. This induces you to make the monthly payments on time and if you can pay the bills regularly, then your credit score will improve gradually.

Tip no 5: Before taking out a credit card, ask yourself if you really need one.

You'll get plenty of credit card offers in your mails everyday. Some offers will be too tempting too resist. No matter how much tempting the credit card offers are, you'll have to make a conscious decision before taking out a card. Credit cards have some associated expenses. You'll have to pay the monthly bills and interests. An additional credit card actually means that you'll incur extra expenses. Ask yourself if you can meet those extra expenses. If your monthly budget doesn't allow you spend an extra dime, then it's best to avoid taking out a new credit card.