With today’s improving economy, you’re probably thinking less and less about your personal debts and spending habits. While debts may seem easier to pay off when times are good, don’t let yourself fall victim to this way of thinking. Ignoring debt and not watching your wallet, even as you coast down “easy street,” can be hazardous to your financial health! Here are four time-tested ideas for keeping you out of financial trouble.

1) Do the Math First.  Start by making a list of all your debts. Break them down into short-term (e.g., credit cards), intermediate-term (e.g., car loans), and long-term (e.g., mortgage) debt. Place long-term debt at the top of the list and short-term debt at the bottom. Just like that, you’ve quickly painted a picture of your current debt situation.

2) Work Your Way Up. Concentrate on the bottom of your list first. Pay off higher interest rate, short-term debt first (e.g., credit cards). Setting up a self-imposed payment schedule can help you manage your short-term debts and reinforce the importance of saving. Ultimately, your goal should be to eliminate all short-term debt and then budget for day-to-day expenses using personal savings rather than credit cards and high interest rate loans.

3) Avoid the Minimum Payment Trap. The interest that accumulates by stretching out payments makes any “bargain” purchase cost a lot more than you think. For instance, if you have a credit card with a 17.9% finance charge and your balance is $1,000, making a minimum payment of $20 per month for the next year will only reduce your balance by $66.26. That means you’d be paying the credit card company $240 in exchange for a $66 reduction in your debt. Simply put, making a minimum payment is like throwing away money!

4) Maintain Your “Impulse” Will Power. If you are prone to impulse spending, don’t go shopping unless you have a specific need. Even then, delay your purchase for 24 hours. Often, an impulse will pass once you’ve had a chance to sleep on it.

Before You Pass “Go”

If you’re finding that today’s American lifestyle leaves you with little choice but to amass some unnecessary debt, don’t panic. These common sense strategies can help you control your debt, making it manageable within your means. While you, along with most Americans, may be enjoying the ride down “easy street” today, making a right turn on to “smart street” will help solidify your personal finances for a better tomorrow.