Debt may be a four-letter word, but that doesn’t mean it is always negative. In fact, when managed correctly, debt helps us achieve many of our life goals, such as homeownership and college education, years before we could do so otherwise.

The key is to keep debt in its place. That’s with you in charge of the debt and not the other way around. Here are my favorite 12 tips to keep your 2012 borrowing right where you want it.

Get a spending plan

You can’t control your money if you don’t know where it’s going. A customized, flexible spending plan will keep your expenses where you want them, so you can build toward your financial goals. Just as importantly, it will make you the master of your debt.

Spend less than you take home

Simple but sometimes hard advice to follow. Take it from me: You will never achieve your financial goals if you continually extend your income using credit. Learn to live on less than you earn, and you will be the envy of your friends.

Set some goals, really pleasant ones!

Setting goals for what you want to achieve — be it a trip to Fiji, a new car or a drop-dead-gorgeous wedding — is what you need to make Nos. 1 and 2 above worth the effort. Saving for goals will also keep you out of debt. If you have money in the bank, you won’t need to finance life’s pleasures.

Fund emergencies before they find you

Saving six to 12 months’ worth of living expenses in an emergency savings fund is the best way to fend off unwanted debt. If you don’t have a stash of cash, begin today with whatever amount you can and save regularly. Make it easier to save than not by having money come out of your paycheck and go into your emergency fund account before you ever see it.

Save for your retirement, so you can enjoy it

I know you love work. But seriously, would you still show up every morning if they stopped paying you? Retirement can be fun. Having fun sooner is better! Try to place as much into your retirement fund as you can each pay period, especially if your employer has a matching program in place.

Pay off balances monthly and get the perks for free

Many people use credit cards for convenience and for the perks some card issuers provide. Avoid carrying a debt balance or have a plan in place to pay off credit card bills in 90 days or less. That way, you’ll get to Fiji faster and have all the money that would have gone to interest available to afford the good life.

Match the life of the product to its financing term

Should you decide to make a purchase using debt, be sure the debt doesn’t outlive the product you purchase.

Know the real cost of carrying debt

The national average annual percentage rate on credit cards is 14.99 percent. That means if you are carrying a balance of $5,000 in credit card debt, you may be paying as much as $62 per month in interest charges. That’s $750 per year you could be spending on other things.

24 months to pay, 24 opportunities to miss a payment

Beware of offers to finance purchases for years without paying any interest. It’s OK to take the deal but pay the debt as soon as you can. The fine print of those agreements usually says that if you are late once, you will pay interest back to the date of purchase — usually at a very high rate.

Know what you owe

Keeping track of what you owe and what it is really costing you is essential to avoiding unwanted debt. You won’t know if you can afford something until it’s too late if you don’t keep score.

Save windfalls and raises

Have half of future raises deducted from your pay and directly deposited into your savings account. Also save half of windfalls such as a refund from the Internal Revenue Service. Then you’ll never be in over your head.

Keep your credit strong

Know what they know before they do. Get a free copy of your credit report annually from AnnualCreditReport.com. Correct errors, and you will save money on mortgages, car loans and insurance. You may also be more likely to qualify for a better job. Yes, some employers check your credit, too.

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