Yahoo earnings beat estimates, sales fall

SAN FRANCISCO (MarketWatch) — Yahoo Inc. on Tuesday reported a smaller-than-forecast decline in quarterly profit, as the Internet search and advertising company presses ahead with an ongoing turnaround effort.

Yahoo’s earnings for the first quarter beat Wall Street estimates, and its shares of rose more than 2% in after-hours trading, following the report.
Sprint looks to share network

Sprint Nextel is in advanced talks to rent space on its wireless network to start-ups LightSquared and Clearwire, a move driven by consolidation and cost-cutting. Spencer Ante reports.

Yahoo YHOO +3.47% said net income fell to $223 million, or 17 cents a share, compared to $310.2 million, or 22 cents a share, in the same quarter last year. The Sunnyvale, Calif., firm said net revenue for the period ended March 31 fell 6% to $1.06 billion.

Yahoo’s first-quarter earnings included an impairment charge of 2 cents a share related to Yahoo Japan, the company said.

The results also compare to a year-earlier period when Yahoo’s earnings were boosted by its sale of the Zimbra email service, and its search partnership with Microsoft Corp.

Analysts polled by FactSet Research had expected Yahoo to report first-quarter earnings of 16 cents a share and $1.05 billion in net revenue.

For the second quarter, the company said it expects revenue excluding traffic acquisition costs to come in the range of $1.08 billion to $1.13 billion. Analysts had been expecting $1.1 billion for the period.

“Our turnaround is proceeding on schedule, and we are very confident that Yahoo is headed in the right direction,” Chief Executive Carol Bartz said during a conference call with analysts.

Bartz pointed to various “proof points,” including the increase that Yahoo saw in online display advertising revenue during the quarter.

Yahoo hired Bartz in 2009 to reboot the embattled company. The CEO has sought to streamline operations and has set a target of reaching a 24% operating margin by 2013. Yahoo said Tuesday that its operating margin excluding the cost of acquiring traffic stands at 18%.

Bartz has also sealed a partnership with Microsoft MSFT +1.19% that has Microsoft powering Yahoo’s search results in a revenue-sharing arrangement.

But in January, Yahoo cautioned that it likely won’t see a significant benefit from the Microsoft partnership in terms of revenue-per-search until the second half of this year, due to “bumps in the road” encountered as the companies align their operations.

Bartz said Tuesday that problems encountered in combining with Microsoft’s search-advertising technology have continued. As a result, Bartz said Yahoo would hold off on moving more of its geographical markets outside the U.S. over to Microsoft’s search advertising technology this year, until the companies “get this thing back to where it needs to be” in terms of revenue growth.

In particular, Bartz said that “as it turns out,” Microsoft’s technology does a poor job of predicting performance for some search advertisers that don’t have a history on their system. Therefore, “many of the new advertisers can’t even get their campaigns in,” she said.

Yahoo said that its gross search advertising revenue fell to $455.1 million in the first quarter, from $841.2 million in the same quarter last year.

Analysts had been anticipating a significant decline in Yahoo’s search advertising revenue.

Yahoo said that gross revenue from online display advertising, a market in which it has long enjoyed a more solid footing, rose to $522.6 million, from $491 million — a 6% increase.

Analysts had been expecting display-advertising revenue growth in the quarter of slightly less than 10%.

Bartz said that Yahoo enjoyed particularly strong interest in its news blogs, and original Web video content. The CEO said that Yahoo’s video advertising still makes up a relatively small part of its total revenue, though it’s “the fastest growing part.”

Yahoo said Tuesday that its total cash, equivalents and marketable securities on hand as of March 31 fell by $101 million compared to Dec. 31, to $3.5 billion.

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Gold Tops $1,500 on Outlook for Escalating U.S. Debt, Dollar

Gold futures rose to a record $1,500.50 an ounce as U.S. debt concerns weighed on the dollar, boosting demand for the precious metal as an alternative investment. Silver surged to a 1980 high.

The greenback dropped against the euro on speculation that the European Central Bank will continue to raise borrowing costs as some nations struggle to contain sovereign debt. Standard & Poor’s yesterday revised its long-term outlook on U.S. debt to negative from stable. Gold has climbed 32 percent in the past year, and silver prices have more than doubled.

“The U.S. credit rating will undoubtedly be lowered in the next few years,” said Michael Pento, a senior economist at Euro Pacific Capital in New York. “This will mean much higher borrowing costs and a much lower currency. International investors have been using gold and silver as an alternative currency and an alternative to the dollar, and this will only exacerbate and accelerate that process.”

Gold futures for June delivery rose $2.20, or 0.1 percent, to settle at $1,495.10 at 1:38 p.m. on the Comex in New York. Earlier, the price climbed as much as 0.5 percent to the record.

Gold for immediately delivery rose $1.97 to $1,497.27 at 3:49 p.m. New York time. Earlier, the price gained as much as 0.3 percent to an all-time high of $1,499.32.
Silver Climbs

Silver climbed as much as 2.8 percent to $44.175 in after- hours trading. The most-active contract settled up 95.7 cents, or 2.2 percent, to close at $43.913 an ounce.

“Silver is like gold on steroids,” said Jon Nadler, an analyst at Kitco Inc. in Montreal.

Euro Pacific’s Pento, who correctly predicted gold’s rally in the past three years, said the metal will reach $1,600 in 2011. The commodity has gained every year since 2001 on increased investment demand for raw materials.

“The bullish trend becomes pronounced as more and more people get out of the dollar to buy hard assets,” said Lim Chae Myung, a Seoul-based trader with Hyundai Futures Co.

The Treasury Department projected that the government may reach the $14.3 trillion debt-ceiling limit as soon as mid-May and run out of options for avoiding default by early July.

The Federal Reserve has kept its benchmark interest rate at zero percent to 0.25 percent since December 2008 and has pledged to buy $600 billion in Treasuries through June to stimulate growth.

The ECB this month raised its main rate to 1.25 percent from a record 1 percent to stem inflation.

The Fed probably won’t risk damping economic growth by raising borrowing costs rapidly, Pento said.

S&P changed its long-term rating, citing “material risk” that policy makers won’t reach an accord on “medium- and long- term budgetary challenges.”

“There certainly has always been that lingering concern over U.S. debt and the S&P people are finally identifying the threat,” said Stephen Platt, an analyst at Archer Financial in Chicago. “The world is awash in liquidity. Gold’s slow, grinding action upward shows the deterioration in the dollar, excess liquidity and deficit problems are still in force.”

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Do you think you will be rich one day?

In this land of opportunity, Americans may believe that it's harder to get rich than it used to be. But when asked about the likelihood of getting rich personally, one-third say it's very or somewhat likely that they will attain wealth because of their work, investments, inheritance or good luck.

On the other hand, six out of 10 (63 percent) say it's not too or not at all likely they'll get rich. Just 2 percent volunteered that they're already rich.

Bankrate commissioned Princeton Survey Research Associates International to explore how people feel about their chances for prosperity, as well as how they define wealth and their motivations for pursuing it.

Hope springs eternal -- for the young. More than half of those aged 18 to 29 (54 percent), believe they will get rich. Meanwhile, cynicism sets in with the passage of time. Only 34 percent of respondents in the 30 to 49 age range believe they will be rich, while one out of five (21 percent) in the 50-plus age group think so.
How would you define rich?
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What is rich, anyway?
Most people don't equate wealth with a yacht in the Mediterranean and a house on every continent. A meager 7 percent of respondents define "rich" by possessions such as houses, cars and boats.

Instead, rich means having just enough money not to worry, to at least one-third of Americans (33 percent), according to the survey. That's a subjective definition that varies with lifestyle and attitude. Another 26 percent define rich as having enough money to quit their jobs.

"I think there is a paradox about it. People could live smaller than they do. There are a lot of McMansion inhabitants who could do that if they wanted to, but they slide on the golden handcuffs, and that is part of what keeps you from feeling rich," says Peter Rodriguez, associate professor of business administration at the University of Virginia's Darden School of Business.

Few people put a dollar amount on the definition of wealth. Just 17 percent say that being rich means having a net worth of $1 million or more, and 11 percent say that a six-figure annual income makes someone rich.

Most people who are rich don't even consider themselves rich. It's a relational feeling, says Rodriguez.

"For example, you take someone who has been earning $40,000 a year and bump them up to $100,000 -- they feel rich. Even if they increase their lifestyle, they don't have to worry about their old bills anymore. But if you take someone who is making $150,000, they feel poor unless they make $300,000," he says.
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How to get rich
One-fifth of Americans (20 percent) believe that starting your own business is the most likely way for someone to get rich today.

History supports that assumption. Most self-made millionaires are small business owners, says Greg McBride, Bankrate.com's senior financial analyst.

Choosing a high-paying job or career comes in second (19 percent) as the most likely path to getting rich.

Unfortunately for most people, having a high-paying job is the ticket to an expensive lifestyle and nothing more lasting, says Todd Tresidder, a financial coach at FinancialMentor.com and self-made millionaire.

Surprisingly, just 9 percent of survey respondents say real estate investments offer a likely path to wealth. Though real estate investors have gotten creamed in the past year, it's been a major moneymaker for some over the years, though it's by no means a sure thing. Plenty of people go bankrupt in real estate.
What is the most likely way for someone to get rich?

What motivates you the most to obtain prosperity?

"You do have to have deep pockets to play the game," says Dan Danford, principal and chief executive officer of the Family Investment Center in St. Joseph, Mo.

It offers a couple of advantages. For one, you can leverage the investment which dramatically increases the return or magnifies the loss.

"The research shows that owning your own business and real estate are two of the most common paths to achieving wealth and financial security. There is a reason for that. Owning your own business and real estate have two principles: They have leverage and tax advantages," says Tresidder.

Surprisingly, 15 percent of people say that getting lucky via the lottery or an inheritance is the most likely road to riches, while 15 percent point to living frugally and saving money as best.

Though living frugally may not have you living like a Rockefeller, it's a more likely route to wealth than winning the lottery.

"Living frugally and saving money are helpful, sure, but winning the lottery isn't even a plan. That's called hope," says Tresidder.
Motivations for attaining wealth
Despite what advertising messages might convey, most people are not motivated to pursue wealth for material reasons. Only 11 percent of those surveyed say they want to be rich to afford material things and pursue leisure activities.

Instead 41 percent of Americans wish to obtain personal prosperity so they can provide a better life and future for their children.

Statistically, only a small fraction of the population will ever be truly rich. Americans sometimes sabotage themselves or are too anxious about current economic conditions to take steps toward prosperity. Danford has a fatalistic point of view when it comes to getting rich.

"I work with a broad spectrum of people, and one of the truisms I've come up with is: People who have money will always have money and people who don't (have money) won't ever have money."

The majority of Americans appear to agree, according to our poll. But optimism prevails with at least a third of Americans who aspire to be wealthy.

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Not everyone thrives in the typical office environment.

The vast expanses of utilitarian cubicle farms are best left to those whose personalities jibe more with logical and structural tasks as opposed to those who lean toward the visual and intuitive, says Judith Gerberg, a New York City-based career development expert and head of Gerberg & Co.

You're likely a good fit for an offbeat type of job if you're more driven by self-expression, can work independently and are more holistic by nature, she says.

Offbeat jobs can range from relatively benign pursuits, such as acting and software engineering, to hazardous occupations, such as commercial fishing and aerospace operations.

Gerberg recommends that you thoroughly assess your skills and the demand for them before setting out to pursue an off-the-beaten-path career because competition for some of these jobs is intense.

"I think that to pursue an odd or risky way of earning a living, you do have to have something that you are passionate about, something that you'll do no matter what and something that is needed and wanted," she says.
Extraordinary vocations

Cell biologist
Alaskan crab fishing
Intelligence officer
Candy manufacturer
Peace Corps volunteer

Cell biologist
Mike Kiledjian, who has a doctorate in molecular biology, is one of many scientists pushing the edge of the genetic envelope to find cures for human diseases.

He says his interest in research started in high school and evolved into an interest in gene expression -- the process by which genes are switched on and off.

Today, the professor of cell biology and neuroscience at Rutgers University in New Brunswick, N.J., leads a team of investigators searching for a drug treatment for a disease known as spinal muscular atrophy, or SMA. It is a leading cause of hereditary infant death in the United States, occurring once in every 6,000 births, according to the Centers for Disease Control and Prevention.

"It's an extremely challenging job, and you're answering questions that really have no answers until you address them, so that's pretty exciting and rewarding if you can answer them," Kiledjian says.

But for every breakthrough there are hundreds of frustrating dead ends. "You can't be easily discouraged because there are many failed experiments, and you have to learn from them and improve on them to get an experiment to work, and hopefully (it will) give you a reliable result," he says.

You have to be patient enough to hang in there until your "eureka moment" arrives, says Kiledjian.

His team identified a scavenger enzyme in 2002 known as DcpS that suppresses a beneficial protein known as SMN. The compound his team is working with inhibits the action of DcpS and may provide some relief to those who suffer from SMA.

What they do: Study the physiology, components and the life/death cycle of cells as they relate to their environment.

Pros: Work can lead to breakthroughs in finding cures for human diseases.

Cons: Requires patience and persistence to deal with setbacks, which are common.

Education required: Bachelor's degree for basic research positions up to Ph.D. for lead researchers and university-level teaching.

Salary range: According to Salary.com, the average is $45,859 for a junior level biologist to $103,030 for a Ph.D. level, depending on experience and regional markets.

A job that's good for: People who enjoy working in a laboratory setting, are adept at solving puzzle-like problems and are very tolerant of failure.

Alaskan crab fishing
Next time you snap open a king crab claw, think about the people who brave some of the world's harshest working conditions to bring these scary-looking but tasty ocean crustaceans to your table.

The industry, like the quarry it pursues, is huge in Alaska.

Some 80,000 jobs in the state are related to commercial fishing, according to John Hilsinger, director of the Alaska Department of Fish and Game's Commercial Fisheries Division.

Those drawn to the rugged wilderness of Alaska and the seasonal work schedule of Alaskan crab fishers often earn lucrative pay, but not without great physical exertion.

Work on the Bering Sea, where the fishing takes place, is grueling and dangerous, and unless you have significant at-sea experience, you can easily find yourself facing a life-threatening situation on the open ocean in the middle of winter -- the height of the king crab season.

Weather conditions on the Bering Sea can change rapidly, and waves as tall as two-story buildings are common.

Still, crew members are not in short supply despite the industry's high occupational fatality rate.

"I think it attracts people who are independent-minded and who are not interested in punching a time clock," Hilsinger says. "They like to work outdoors and sometimes make big incomes. Plus there's an element of excitement and risk to it."

The king crab season typically lasts for only two months.

Experienced crewmembers working on top-producing boats often earn a decent percentage of the season's catch with the captain and other senior crewmembers taking home the largest percentage after expenses.

Inexperienced deckhands, or greenhorns, earn substantially less and are often paid a day rate, according to Hilsinger.

What they do: Fish for one of three king crab species in addition to opilio and snow crabs.

Pros: Potentially high wages earned in a short amount of time. During the off-season, crewmembers can fish for other species such as salmon to supplement their incomes.

Cons: The work is extremely dangerous, hours are long and work conditions can be brutal. In addition, crewmembers are responsible for buying their own boots, coats and survival gear, which can cost hundreds or thousands of dollars.

Education required: No formal education is required, although substantial experience working on a commercial fishing vessel is recommended.

Salary range: Boat captains can earn around 15 percent after expenses; engineers and other senior crew may earn 7 to 7.5 percent; inexperienced crewmembers may earn 2 to 3 percent of the season's catch. In terms of dollars, experienced crew members can earn between $15,000 and $40,000 during the short two-month season, according to estimates by Forrest Bowers, a fisheries biologist based in Dutch Harbor, Alaska.

A job that's good for: Those who like working outdoors and do not like prescribed work schedules.

Intelligence officer
If you think the federal government doesn't hire people to fill off-the-beaten path jobs, think again.

The U.S. intelligence community, which consists of 16 acknowledged civilian and military agencies, has long been glamorized by actors Harrison Ford, Ben Affleck and Jake Gyllenhaal, who portray the lives of stoic field operatives.

But what most people don't know is that organizations such as the Central Intelligence Agency -- possibly the best known of the 16 agencies -- also actively recruit personnel for roles beyond the National Clandestine Service for which the CIA is best known.

Well-paying jobs as language instructors, information technology specialists, cartographers and even graphic designers are available to qualified job seekers.

A recent survey of the agency's Web site revealed a job posting for an electronic publishing specialist, otherwise known as a desktop publisher, that pays between $45,639 and $79,248 to start. It requires only an associates degree and is based in the U.S.

"All of our directorates are hiring," says Marie E. Harf, a spokesperson with the CIA's Office of Public Affairs in Washington. "We're looking for a wide range of skill sets to fill positions with the agency."

Harf says people who work as intelligence officers come from diverse backgrounds and have unique skills, but all have the highest standards of character and are motivated by a desire to serve their country.

The lengthy application process can be a turnoff for some job seekers, since background checks can take a year or longer.

What they do: CIA agents essentially act as the eyes and ears of the president in collecting and analyzing information relating to national security. Officers serve both in the United States and abroad.

Pros: It is a meaningful and well-paying job with excellent job security. Those who leave government service to pursue civilian work have clout. Many government contractor jobs, for example, require civilian employees to obtain security clearance.

Cons: Competition for all positions is fierce. The application process is complicated, lengthy and includes taking a polygraph test. Relocation to the Washington, D.C. area is required for most support positions.

Education required: Bachelor's degrees are standard for most positions, and advanced degrees are highly sought after but not necessary for all positions. Some positions only require an associates degree or relevant training.

Salary range: Foreign language instructors earn $55,512 to $95,026, fitness specialists who train agency operatives earn $50,408 to $79,280 and graphic designers with interactive multimedia emphasis earn between $48,682 and $95,026, although the Agency says they can earn more depending on experience.

A job that's good for: People who are interested in federal service and who don't mind working within a rigid organization.

Candy manufacturer
Amanda Jones ditched her 9-to-5 job a few years ago to make fudge.

She now works up to seven days a week as head of Brooklyn Fudge in Brooklyn, N.Y., and although she now works a lot more than she used to, she wouldn't trade her job for any other.

"I worked for corporate America for a long time and made a lot of money there, but I didn't really feel like what I did mattered," Jones says.

The native Virginian says that she was always inspired by her Aunt Mae's southern cooking and found that it relaxed her to re-create her aunt's recipes.

It was that combination that coaxed Jones out of the cubicle and into her kitchen where she initially started the business.

"I started playing around with my aunt's fudge recipe because it was something I enjoyed doing and before I knew it, I had 40 pounds of it so I started trying to educate myself on how I would go about selling it," she says.

Since 2006, when Jones first started selling her handmade confections at local craft fairs, the business has evolved to the point where she now fields orders from international clients and is looking for ways to improve packaging and shelf life.

Her uncanny ability to tinker around with flavors enables her to offer a product lineup that ranges from the relatively safe to the sublime. Standards include pecan and cinnamon-almond and seasonal varieties like blueberry vodka, pumpkin pie and absinthe.

What they do: Produce, package and market sweets for the retail and corporate markets.

Pros: You get to produce a product that most people find pleasurable to consume.

Cons: You may have to wear several hats until you can hire employees. You have to work according to your production and marketing goals and customer demand for your product.

Education required: A basic affinity for cooking and culinary background is recommended as well as knowledge of FDA labeling requirements.

Salary range: Net profits vary with $40,000 to $50,000 per year on the low end, according to Jones. Based on her current pricing structure, Jones should have grossed about $1,120 from her initial 40-pound batch. She anticipates a much higher income going forward. "I think the goal is to become a million-dollar company."

Who this job is good for: People who enjoy cooking or baking and interacting with customers and suppliers.

Peace Corps volunteer
When David Leavitt graduated from the University of Denver in the mid-1980s with an accounting degree, he likely could have found a well-paying corporate job.

Instead, he dreamed of overseas adventure and became a Peace Corps volunteer, teaching business skills to locals in the Dominican Republic.

Leavitt was interested in doing international development work and saw the Peace Corps as the perfect vehicle to get relevant experience. Today, he is a public affairs specialist for the Peace Corps' Southeast regional office in Atlanta.

The Peace Corps does not pay a salary, and volunteers are required to commit 27 months of their lives. Leavitt says the value of the experience transcends salary and really provides career benefits long past the two-year commitment.

"The real value there is that (volunteers) have developed language skills, they have developed cultural sensitivity and they have more of a world view which is an important asset both in the public and private sectors," he says.

Volunteers who stay in the Peace Corps for two years qualify for one year of non-competitive eligibility, says Leavitt. That means a federal agency can hire you without even advertising the position. Many times, federal agencies call Leavitt to see if he can refer a recent volunteer to fill a position.

"That's a huge advantage to get into the federal service because it is hyper-competitive," he says.

What they do: Volunteers work in foreign countries assisting local communities with education, youth outreach, business development, agriculture, health and information technology related issues, etc.

Pros: Special eligibility for federal jobs when you return home. Camaraderie of being with a group of like-minded Americans. No upper age limit. Minimum age is 18. Full medical coverage during service. Student loan deferment. Compensation of $6,000 upon completion of service. Forty-eight vacation days over two years. Perkins loans are eligible for a partial cancellation benefit.

Cons: Twenty-seven-month commitment. Isolation from family and friends. Potential for political instability, depending on country assigned. Could contract illnesses while on duty.

Education required: Formal education not necessary, although certain educational degrees such as agriculture, business and information technology are favored. Practical business experience is also acceptable in lieu of education.

A job that's good for: People in certain in-demand backgrounds such as agriculture and education. Also, people who have a curiosity about foreign cultures and a desire to help them.

Salary: Volunteer positions do not pay, although staff positions can be competitive depending on job title. Administrative officers serving overseas, for example, can earn between $42,314 and $76,688 to start. A regional recruiter serving in Los Angeles can earn between $42,782 and $51,083 to start. An occupational health nurse serving in Washington earns between $64,284 and $94,403.

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Money management 101

From the middle class to millionaires, everyone feels a few dollars short of comfort at times. But more money won't necessarily solve financial difficulties.

Developing strong money management skills can help you use the money you have today to live the life you want. Plus, when your ship does come in -- the great job, the winning lottery ticket or the inheritance from rich Uncle Bob -- you'll know how to handle it.

"People need to have a plan for their money," says Steve Bucci, Bankrate's debt adviser and president of Money Management International Financial Education Foundation. "If you don't have a plan and the other person does have a plan, they're going to win because they have the discipline, goal and desire and you're just sort of playing by ear."

And who is the other person? Marketers, says Bucci, who also authored "Credit Repair Kit for Dummies."

It's not your imagination; people are out to get you -- or at least your money. Being prepared will help you counter the very real forces out there that want you to spend, spend, spend.
Savings strategies

Set goals
Track spending
Automate savings
Prepare a budget
Change behavior
Borrow wisely
Prioritize bills

1. Set goals
Not all superfluous spending goes to shiny new toys and baubles. Money can be easily frittered away via expensive cable packages or restaurant meals, to name a couple of examples.

Setting goals provides a mechanism for overriding the impulse to buy things that are not as important.

"People don't often associate spending plans with dreaming, but if you do it right, it's a key ingredient," says Bucci.

"You need a reason not to spend on things that don't matter. You decide that you have a goal in mind that is more important."


Writing down your goals will help prioritize spending when it comes time to map out your plan. Bucci recommends writing short-term, medium-term and long-term goals on note cards. If you have them, include kids and the significant other in the process.

"You make your choices, but you need to have the dream or the goal and the money plus knowing that you're going to be able to put the money aside," he says.

2. Track spending
"The only way to plug the leak is to know where the leak is," says Gail Cunningham, senior director of public relations for the National Foundation for Credit Counseling.

Take some time to try to follow every cent spent: the rent payment, the $3.32 latte, the 50-cent newspaper, the 79-cent pack of gum -- everything. Don't judge yourself now or feel angst over purchases.

Almost everyone can usually account for most of their spending with a cursory overview of their finances, says Bucci. "Most people can get to 90 (percent), but the last 10 percent is a killer.

"It disappears ... lattes, tips, food at work, allowances for the kids. Just write it down and by the end of the month you'll have most of the 10 percent and know where almost all of your money goes," he says.

Continue to take notes on spending after the first month. "Keep up with the balance in your checkbook, each time you make a deposit or withdrawal, reconcile or balance your checkbook and also reconcile your statement when it arrives," Cunningham says. "No one wants to do it, but it is important."


"Even if you use a debit card, you have to write that down in your checkbook -- you should carry something around that is going to keep up with your balance."

3. Automate savings
"We're the only industrialized nation with a negative savings rate; people are spending more than they make," says Dave Jones, president of the Association of Independent Consumer Credit Counseling Agencies.

To combat sluggish savings, earmark a certain percentage or dollar amount for a savings account. Savings accounts can be either specialized retirement accounts or regular deposit accounts. Start small to get into the routine of saving regularly.

"When you're getting started, it's more important that you get in the habit of saving rather than that you save a lot," says Bucci.

Use windfalls and raises to jump-start savings as well. Got a raise at work?

"Put that money toward savings. You were living just fine without it," says Gail Cunningham, senior director of public relations for the National Foundation for Credit Counseling.


Bucci recommends funneling half of the newfound income into savings. "The other half you get to spend," he says. "So you're not missing anything, you're not taking anything away from yourself. You're still getting more money then you had before, but now you're saving a little bit more."

4. Prepare a budget
"We all need to do what is right for us," says Gail Cunningham, senior director of public relations for the National Foundation for Credit Counseling. "Some people might want to use Quicken or another computer software program and others might want a pad and pencil. It's just a matter of knowing what works for them."

If possible, send a set percentage of your income straight to a savings account and try to configure your budget as though that money doesn't even exist.

Cunningham recommends that people divide their spending plan into separate categories with necessities taking top priority. Necessities would include housing, utilities, medical insurance, food, child care, secured loans, car payments, insurance and co-signed loans. Then comes the unsecured debt, miscellaneous and entertainment expenses -- plus any other applicable categories.

Plug in your income and the amount of money shuttled into each category every month. You may see areas where you can trim some fat. For instance, you could save hundreds of dollars a year by requesting lower interest rates on credit cards or shopping around for car insurance. Unnecessary drains on funds will become apparent and you have the foundation in place to take action.


"A spending plan will let people understand exactly what bills need to be paid first -- or if they need to put a little extra cash toward a bill," says Dave Jones, president of the Association of Independent Consumer Credit Counseling Agencies.

5. Change behavior
Ideally everyone would have plenty of money leftover at the end of the month. But if necessities leave you tapped out by the 20th of the month, it may be time to take drastic steps such as getting a roommate or finding a second job.

Sometimes a change could be as easy as not eating out twice a week. "If someone is spending $100 a month on pizza, then they might decide they want to look at that and say, 'Well it's fine to order pizza in, but we're only going to do it once a week instead of two times a week,'" says Gail Cunningham, senior director of public relations for the National Foundation for Credit Counseling.

"I have found that it is more successful if a person cuts back rather than cutting out," she says. "So back to our pizza example, don't say, 'OK, no more pizza.' Just say, 'OK, let's be more judicious.'"

Curtailing credit card usage -- especially on impulse -- might be the best behavioral change you can make, particularly if you already have a large amount of credit card debt.

Another thing to do: "Get organized," says Cunningham. "You're not going to believe it, but people walk into our centers carrying grocery sacks full of unopened bills. And in that grocery sack are unopened letters from their mortgage lenders."
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Use a filing cabinet or a simple box to keep financial documents in order. Bills should be kept handy in a designated box or basket. The important thing is to set up a system that works for you. "It will save you time and you won't have to look for misplaced documents," she says.

6. Borrow wisely
Credit can be a good thing. Loans allow people to buy cars, houses, boats and even help cushion the blow in emergencies.

"It's fine when it's used properly," says Bucci. "What you have to know is that you're taking from tomorrow's money today."

On the other hand, people don't always make buying decisions rationally and can easily rack up thousands upon thousands of dollars in debt.

"If you have a $10,000 credit card bill on an 18 percent interest rate credit card and you make the minimum payment of 2 percent -- though some companies have higher minimums -- it will take 40 years to pay off that bill," says Dave Jones, president of the Association of Independent Consumer Credit Counseling Agencies. "And that's if you never make another purchase on that card."

To keep a perspective on borrowing, match a loan to the life of the product. "If this is a purchase that is going to take you a long time to pay off, then you use long-term credit to pay it off -- not short-term credit," says Bucci.

"Use long-term credit for big purchases and short-term credit for purchases that you're going to pay off in a reasonable amount of time," he says. Extreme examples would be buying a car with a credit card or taking out a home equity loan to replace a sofa.
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"You look at the couch that you're going to buy, and think this couch is going to be trash in five years. You don't want to be paying for a couch you no longer have 15 years down the line," Bucci says. "The payments shouldn't outlive the purchase."

7. Prioritize bills
Late fees and exorbitant interest rates can eat away at even well-stocked coffers. Whether you're juggling a lot of financial plates or have only a couple of monthly obligations, paying on time -- every time -- is essential.

One of the great conveniences of modern life, online bill pay allows consumers to schedule bill payments without touching a checkbook or finding postage stamps.

Some people prefer the security of real-world actions to virtual ones, however, which means they need to plan ahead.

"Payments need to be sent at least seven to 10 days before the due date," says Gail Cunningham, senior director of public relations for the National Foundation for Credit Counseling. "Write the date that you are going to mail it in the upper right hand corner under where the stamp goes and then file those bills in chronological order so that anytime you sit down, you have at your fingertips which bills need to be paid."

She also advises that if money gets too stretched, necessities should always come before paying unsecured debt.

"Last in line are the creditors, but often the consumer pays them first. I always say if your creditor is happy and your electricity has been cut off, you've done it backward. But really, though, the creditors put on the pressure."

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