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Check out the 5 financial tips for the fourth week of January 2014.

Tip no 1: Repay the costliest debt and take steps to lower your interest rate to attain financial independence.

Check out the interest rates on all your debts and list them from highest to lowest. Pay the maximum amount on the debt with highest interest rate. Make sure you keep on making the minimum payment on the other debts.

If you feel that the interest rate on the debt is too high, then what you need to do is take steps to lower it. You can transfer the balances from a credit card with high interest rate to a card with low rate. You can just go to another bank and transfer the balance to a card having low rate. In most of the cases, these cards are offered at low rate for a certain time period. Shop for a card which gives you the longest time to pay the interest rate.

Tip no 2: Live on brown rice and beans when your funds are tight but you don't want to compromise on nutrition.

You can get a pound of dry beans at $1. You can purchase beans in bulk from the store and save dollars. The best part of dry beans is that you only need to cook a very small amount. This is because the volume of dry beans increases at least 3 times after cooking. You can add some spices and herbs to have a delicious and nutritious meal.

Brown rice is again very cost effective and good for health. Brown rice contains some essential elements such as vitamins, anti-oxidants and minerals. Moreover, it keeps you satiated for a long period of time.

Tip no 3: It's great to be an entrepreneur. Just make sure you don't go over the limit. Start small and grow gradually.

It takes time to fulfill your dreams as an entrepreneur. You'll make mistakes and fall. You may not even reap profits at the beginning. You need to be committed towards your business and be patient. Don't go over the limit or overcommit at the beginning. Take one step at a time and grow your business gradually.

You'll need money to start and develop your business. Don't borrow a very huge amount. Your business may not reap huge profits in the initial years. This may make it very difficult for you to pay off the loan.

Tip no 4: Don't skip mortgage payments to pay down your credit card debts. It will open the door to foreclosure.

Mortgage is a secured debt and it should always get preference over credit card debts. If you stop sending payments to a mortgage lender just to keep a credit card company happy, then you're doing a big mistake. The lender can initiate the foreclosure process anytime. You can lose your dream abode just for the sake of a few plastic cards. On the other hand, credit card companies are likely to quickly terminate the accounts when you stop making payments to them. This is comparatively a small sacrifice since you won't be evicted from your home after going through hell for several months.

Tip no 5: Treat emergency fund as a bill on which you have to make a payment every month. This will help you build a financial cushion.

Here's a good financial tip. Treat your emergency fund as a credit card or utility bill. Make a list of the bills that you have to pay every month. Add emergency fund in that list too. Since you're the owner of the emergency fund, so it is your responsibility to determine the amount you need to save every month. Set aside an amount from your paycheck and save it in your emergency fund. This fund will be extremely useful when you're in a financial trouble.

With proper help you can
  • Lower your monthly payments
  • Reduce credit card interest rates
  • Waive late fees
  • Reduce collection calls
  • Avoid bankruptcy
  • Have only one monthly payment
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