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Pay off debt now: 5 steps to getting
your finances in order
In
our world of dizzying change, nothing is more true than the time honored
statement that circumstances always change.
No where is this more true than with financial issues.
Have you ever borrowed money, or charged up the VISA card at Christmas,
all the while telling yourself that you would pay everything off with a
coming tax refund or bonus?
Sound familiar. And then what happens when the bonus money arrives?
Let me guess….circumstances changed, the car needed brakes (or the kids
needed braces, etc), and the VISA debt and interest charges keeps piling
up.
Unless you have a plan, you will always be caught in the unpredictable
grip of “changing circumstances.”
This is a slippery slope that can very quickly can become serious
financial stress. Consider the fact that Americans are declaring
bankruptcy at record rates. One in every 100 families is affected by a
bankruptcy.
I was on this slope 10 years ago. Declaring personal bankruptcy and
filing for divorce went hand in hand.
One of the most insiteful moments of the process was preparing a written
log for the trustee of all of our spending for the 5 years leading up to
bankruptcy.
While all of the individual decisions made sense in the moments that
they were made, they looked totally foolish in the context of the
“bigger picture”
In other words, constantly changing circumstances drove us off our
financial roadmap.
Consider this five step plan for getting on, and staying with, your
financial roadmap.
Step No. 1: Make a list of what you owe & prioritize: Put all your bills
in a pile. Then list your debts in order, starting with the largest
balance first. Then prioritize your repayments (ie paying down the
highest interest rate first).
Step No. 2: Eliminate credit cards and don’t roll over balances. Once
paid off, notify the company that you want to close the account.
Step No. 3: Make a spending plan. Change your free-spending ways. Track
the money that’s coming in and going out. Use a debit card instead of
your credit card. Download your bank transactions into a computer
program for easy categorizing.
Step No. 4: Be careful about the equity in your home. Billions of
dollars worth of equity has been withdrawn from millions of homes in the
last few years. But many people pay down credit cards only to charge
them up again – and then you don’t have the safety net of the equity in
your home.
Step No. 5: Get help. For some people, the problem of overspending is a
psychological one. Spending can become a habit that’s as difficult to
kick as alcohol, drugs or gambling. Sometimes, its due to circumstances
they truly could not avoid: medical bills or divorce or loss of a job.
You can talk with a credit counselor on a private basis. It only appears
on your credit report if you enter their debt repayment program.
During this holiday season, as you consider your finances, remember that
Americans are now carrying $683 billion in revolving credit card debt.
47% of the people who paid less than the full amount on their credit
card bills in a recent month, made only the minimum payment due.
The good news is that planning and professional help will definitely
help you turn things around.
Case in point: I went from bankrupt with zero assets living in a
boarding house, to gainfully employed, running my own homebased
business, with 2 houses and excellent re-established credit.
In other words, it can be done
This article is the property of
www.bestcreditcardsonline.com,
which has been offering credit cards services since 2002.
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