Damaged credit, bank account all but depleted, credit and tax debt. Any of this sound like you?
If you are struggling with any of these issues, know you aren’t alone.
There are many people out there going through the same thing, struggling to get their financial lives back in order.
Here are a few steps you can take to begin this process and get back on your feet.
The most important thing is to budget your spending from here on out. This will help your bank account grow and your debts decrease.
Know how much you need each month to survive.
Remember spending categories like rent/mortgage, utilities (including phone, internet, TV, power, water), car payments and insurance, gas, groceries, medical, savings, and set a miscellaneous section to cover anything else.
You can do it all in a notebook with each page dedicated to each “account,” or even go old fashioned with labeled envelopes to physically separate the allocations you’ve made.
Each paycheck you get, sit down with your book and dedicate a specific amount of that check to each account.
It should be the same each week or pay period. Any time you spend money, write it in the corresponding account and deduct it.
The idea is that your budget book will follow your bank account, but in a more controlled way so you can see where you are spending.
There are many agencies out there to help in situations just like this. Monitor your credit monthly and know your credit score.
Debt management programs can be a big help to increasing your credit scores.
They can set up payment plans to pay all the debt off, or they can negotiate to settle some unpaid debt, depending on your situation.
There are also programs and agencies out there for tax debt relief for settling unpaid taxes. There is plenty of help out there; you just need to look for it.
Set your goal
There is a saying, “Discipline is deciding between what I want now and what I want.”
Set your end goal, what you want to accomplish, and write it down and post it where you can see it each day. This will give you renewed drive each day to stick to your plan.
Use the S.M.A.R.T. goal system to help determine your goals. “S” for Specific. Don’t make some general “I want to have more money” goal.
Name something real to be working towards. “M” for Measurable. You need to be able to see the end in sight.
Tracking savings per week or month for example, can help measure the success of your working towards the goal. “A” for Attainable.
Make sure your goal is something you can reach. “R” for Realistic. If you are $100,000 in credit card debt, being debt free in 12 months is not realistic.
See what can be done and aspire to do it, but don’t set something so hard that it’s just impossible to reach. “T” for timely. This is your deadline.
Take into account how much debt you have and what your income currently is when determining your deadline.
You CAN become debt free
Intentions mean nothing without action. Now that you know, you have to also “do”. Following these steps will help bring some control where you have felt helpless.
Whatever your financial situation, you are now empowered to live your life without the weight of debt.
License: Creative Commons
Sean Carter is an experienced writer who has covered the topics of debt, finance and ecnomics for a wide variety of blogs
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