(Part 1 of a 3-part series on getting your finances in order)

“Saving money? You’ve got to be kidding!  I’d be doing well to keep up with my bills, never mind having anything let over to put away.”  I hear this refrain from many clients when I suggest they need to think about saving for their child’s college tuition, their own retirement, or an emergency, like a transmission for the car or a new roof for the house.

Most U.S. households have trouble putting money away – statistics show that Americans, on average, save only 1 to 2 percent of their family income.  It can be difficult to resists impulse buys (“I’ve got to have that new cell phone”); to recall what you’ve spent (“I forgot about the fall clothing expenses when I decided to buy that new flat screen”); to plan and shop with an eye toward saving (“I’m lucky to get all my groceries for the week, much less worry about how much I might save on bananas or toilet paper”).

Your ability to save is, of course, tied to how deeply you’re in debt.  So before I set you up with a successful savings program, here’s a plan to get you out of debt and spend less.

First, Get Out of Debt

Your first goal is to live within your means – no more purchases on charge cards – while you pay off your consumer debt.

1. Transfer your consumer debt to zero-percent or low-interest credit cards. The lower the interest rate, the less you will pay each month. Typically, such offers are sent to customers with good credit, but you can also find them online. (Compare offers on creditcards.com and bankrate.com.) Credit card companies usually extend the offer for only 12 months, and charge a 3-percent transfer fee for switching balances from other cards. The best offers require no transfer fee, but these are rare. If you haven’t paid off your debt before the offer expires, you’ll have to transfer the leftover balance to a new zero-percent of low-interest rate credit card.

2. Set up automatic monthly payments through online banking. This will ensure that your zero-percent or low-interest credit card payment is never late. You don’t want to lose this great rate. Log onto your bank’s website, open an account, and sign up for online bill paying. Then create monthly payments for other bills you can start paying automatically. These bills should include predictable charges, such as a mortgage payment, and payments to utility and phone companies.

3. Add up the payments you have been making on your various higher-interest credit cards and pay at least that total – preferably more – each month on your zero-percent credit card.

4. Don’t close your paid-off credit card accounts – having unused credit raises your credit score The higher your credit score, the lower the interest rate you’ll pay on mortgages and car loans in the future.

5. Keep your paid-off credit card in a safe but difficult-to-access place. You might give your card to a family member. Explain that you’ll ask for it only in a case of emergency. Another option is to place the card in your safety deposit box. Or – if you’re an extreme spender – try freezing the card in a block of ice in your freezer. By the time the ice melts, you will have figured out whether a prospective purchase is something you need or something you just want.

(Part 2 – “Adopt Smart Saving Strategies” – will be available next week.)