If you have been troubled by economic downturns or if you are overwhelmed by debt for any of various reasons, you don't have to give in to stress and worry about your financial situation. You may have already been hit by mortgage payments and credit card bills that keep you awake at night, worrying about how you recover. The good news is that you can read on to learn some tips and techniques that will help you become debt free for life.
The first suggestion that you should implement is to know where you stand. Keep track of every penny you spend for a full month. This includes money put into parking meters or on grabbing a candy bar from the vending machine at work. This is likely to reveal some ways that your money disappears without much to show for it.
From the information in the records for the month, build your personal or household budget. Allow for your non-negotiable payments first and the amount that is left is what goes for paying down your outstanding obligations. The first of the non-negotiable items is yourself. If you are unable to discipline yourself to place money in savings, have it withdrawn from your paycheck and electronically deposited into your savings account.
Your first major project in your get-out-of-debt program should be to create an emergency fund. If you have to sell off some unwanted items, or take a temporary job for a few weeks, or simply cut back on unnecessary expenses for a period of time, take the funds and place them in an Emergency Fund. This should be an amount such as $500 or $1000 which is to be used only for true emergencies.
From the budget which you created, determine the amount of money which can be spent in reducing your outstanding obligations. Pay the minimum monthly payment on each of the balances, except the one which has the smallest monthly payment. Put all of the optional funds left over onto that balance each month until it is paid off. Then add that payment amount to the next smallest payment until it is paid. Continue this process until you don't owe anyone anything.
If you need additional support or encouragement, contact a trusted friend or family member and ask them to serve as your financial mentor. Make a pact that all expenses over a stated amount will be cleared with the mentor. You will need to justify each of the purchases. Do a regular review of the spending pattern for the month so that you stay on track.
There are two methods which can be used to accelerate the process of getting out of debt. Either expenses must be cut or income must be increased. You can make a game out of ways to cut expenses. There are as many ways to reduce expenses as there are households. Another alternative is to find ways to increase your income.
Learning to live within your means is not an easy process. You will gradually learn the value of not spending money you don't have. The stress reduction that goes along with debt free living is good for your health.
The first suggestion that you should implement is to know where you stand. Keep track of every penny you spend for a full month. This includes money put into parking meters or on grabbing a candy bar from the vending machine at work. This is likely to reveal some ways that your money disappears without much to show for it.
From the information in the records for the month, build your personal or household budget. Allow for your non-negotiable payments first and the amount that is left is what goes for paying down your outstanding obligations. The first of the non-negotiable items is yourself. If you are unable to discipline yourself to place money in savings, have it withdrawn from your paycheck and electronically deposited into your savings account.
Your first major project in your get-out-of-debt program should be to create an emergency fund. If you have to sell off some unwanted items, or take a temporary job for a few weeks, or simply cut back on unnecessary expenses for a period of time, take the funds and place them in an Emergency Fund. This should be an amount such as $500 or $1000 which is to be used only for true emergencies.
From the budget which you created, determine the amount of money which can be spent in reducing your outstanding obligations. Pay the minimum monthly payment on each of the balances, except the one which has the smallest monthly payment. Put all of the optional funds left over onto that balance each month until it is paid off. Then add that payment amount to the next smallest payment until it is paid. Continue this process until you don't owe anyone anything.
If you need additional support or encouragement, contact a trusted friend or family member and ask them to serve as your financial mentor. Make a pact that all expenses over a stated amount will be cleared with the mentor. You will need to justify each of the purchases. Do a regular review of the spending pattern for the month so that you stay on track.
There are two methods which can be used to accelerate the process of getting out of debt. Either expenses must be cut or income must be increased. You can make a game out of ways to cut expenses. There are as many ways to reduce expenses as there are households. Another alternative is to find ways to increase your income.
Learning to live within your means is not an easy process. You will gradually learn the value of not spending money you don't have. The stress reduction that goes along with debt free living is good for your health.
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