Do you dream of becoming wealthy and debt free? Unless you win a large prize in a lottery, you need to look at ways to make your money go further. You may not be able to control the amount of money at your disposal; however, by taking control of your personal finances you will gain financial security. Here are five tips to help you control your finances and reduce your debt.

1. Take Charge of Your Credit Cards

How many credit cards do you have? If the answer is more than one, you should consider consolidating your debts by choosing the best credit card to suit your circumstances and closing the other cards.

A bank officer will be happy to organise consolidating your debts onto one card. You may be able to negotiate a special deal to reduce the interest rate on your new card for the first six months to twelve months. To avoid the temptation of spending more money, cut up the cards you no longer require.

Depending on the amount of money you owe on your credit cards, and how well you can control your spending, it may be worthwhile to consider asking your bank manager for a personal loan to pay off your credit card debt.

Once you have a personal loan, you can change your card from a credit card to a debit card. A debit card allows you to purchase items using your own savings account. Your bank may offer a visa debit card, so you can use your card when you purchase items over the internet or over the phone. Remember though, consolidation through personal loans and credit cards will require you to met a strict eligibility criteria which most likely involves having a good credit history.

2. Start Saving

Before you open another savings account, consider using any extra cash you may have to pay off your credit card. The interest rate on your credit card will be higher than the interest rate you can obtain from a savings account.

Once you have reduced, or paid off, the debt owing on your credit card the next step is to open a term deposit or a high-interest savings account. Do not lock away all of your savings because you may require money for an unforseen circumstance, such as repair or replacement of a car or a household appliance.

If you find it difficult to save money, set yourself a savings goal and give yourself a reward if you succeed. For example, if you save regularly for six months, reward yourself with a weekend away.

3. Pay Extra Money into Your Mortgage

Although interest rates were low during the global financial crisis, interest rates have been steadily rising, since. If you can afford to pay even a small amount of extra money into your mortgage account, you will benefit financially.

Paying money into your mortgage is an ideal way to save because you will shorten the life of your mortgage by years and money invested into your mortgage is not taxed at the end of the financial year. Speak to your mortgage broker or financial adviser about the benefits of paying extra money into your mortgage.

4. Pay Extra Money into Superannuation

Once you have organised your credit cards and your mortgage, it is time to consider paying extra money into your superannuation. The amount of money that your employer puts into your superannuation is not enough. You will not be able to retire on even half of your current salary, if you rely entirely on the employer contributions. The government offers incentives for you to pay extra into your superannuation. Low income earners will benefit especially as the government will match dollar for dollar for the first $1000 that you put into your superannuation. These rules are often changing so make sure you seek professional independent advice.

Go to the Australian Securities and Investments Commission website for financial tips about superannuation, or alternatively talk to your financial adviser.

5. Teach Your Children How to Budget

You can begin teaching your child to budget when he is young. A five-year-old child is capable of managing a small amount of pocket-money. If you start to train your child from an early age, he will be better able to budget when he is an adult. A child that has learnt to budget will not make constant demands on you for extra cash when he is older.

Teaching your child to budget will not only ease your own financial burden, but will give your child the tools he needs to become financially secure when he grows up.

Take charge of your credit cards, start a regular savings plan, pay extra money into your mortgage or your superannuation, and teach your child how to budget. Follow these tips and your financial security will be well on the way to being assured.

This article is for educational purposes only and is not financial advice. Consult your financial adviser or other professional before making a decision about any financial transaction.