Mellody's Free Money Tips

June 29, 2009 — -- "Good Morning America's" financial contributor Mellody Hobson took to the streets in Chicago this weekend to dish out financial advice to anyone who asked. But for every personal problem she listened to, she had more advice and tips for many others in similar situations.

Check out her advice on how to tackle various financial situations below, then click hereto find more of Mellody's financial wisdom.

Joy Ragsdale is an attorney in Washington, D.C., who is looking to buy a home, but she said she still has to pay off student loans and has $5,000 in credit card debt. She has consolidated her loans, but the interest rate on her credit cards is "like 23 percent," she said.

For cases like Joy's, Mellody said debtors need to set priorities for their debt.

"If you are confronted with student loans and credit card debt at the same time, you almost always want to attack the credit card debt first," she said. "I would start by knocking that credit card debt down, because that rate is killer. Then I would make a commitment to save 20 percent before buying a home."

Cheryl and Paul Nee got married recently, and have two homes and three kids between them. They're looking to merge their finances, a move Mellody said is important, especially because of the housing situation.

"You're going to have so much more financial freedom when you're down to one mortgage," she told the pair.

Also, Mellody reminded the couple about basic things newlyweds need to take care of to make sure they're properly taking care of each other.

First, she said, always have emergency money "squirreled away" — three to six months worth of living expenses in case you can't work. Also, "make sure you do a will, particularly when you're blending families."