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.
To begin the process of eliminating debts, you must have a firm knowledge of your precise economic condition. Keeping records of each penny earned and spent over the next month will give you a starting point. If you spend even a few coins for a vending machine soft drink, or a quarter in a parking meter, write it down. You may be surprised to learn where your money is being spent.
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 If you are unable to discipline yourself to place money in savings, have it withdrawn from your paycheck and electronically deposited into your savings account.
Establish an emergency fund as a high priority in your program to eliminate debts. The amount should be at least five hundred dollars and one thousand is better. When you have this money in an emergency fund, you won't have to worry about a trip to the dentist or unexpected car repairs. The money will be in the emergency fund.
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 only two ways to speed up the get-out-of-debt process. You will either need to reduce your expenses or increase your income. Look back at the expense tracking that you did early on and think of ways that you can reduce these costs. Transportation and housing are often the largest budget outlays, but there are many small items which could be reduced. Adding income doesn't have to be a second job. It could be having a yard sale or placing items on consignment at a thrift store.
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.
To begin the process of eliminating debts, you must have a firm knowledge of your precise economic condition. Keeping records of each penny earned and spent over the next month will give you a starting point. If you spend even a few coins for a vending machine soft drink, or a quarter in a parking meter, write it down. You may be surprised to learn where your money is being spent.
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.
Establish an emergency fund as a high priority in your program to eliminate debts. The amount should be at least five hundred dollars and one thousand is better. When you have this money in an emergency fund, you won't have to worry about a trip to the dentist or unexpected car repairs. The money will be in the emergency fund.
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 only two ways to speed up the get-out-of-debt process. You will either need to reduce your expenses or increase your income. Look back at the expense tracking that you did early on and think of ways that you can reduce these costs. Transportation and housing are often the largest budget outlays, but there are many small items which could be reduced. Adding income doesn't have to be a second job. It could be having a yard sale or placing items on consignment at a thrift store.
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.
About the Author:
When you are looking for information on how to be debt free for life, you can go to our web pages online here today. Details are available at http://www.debt-elimination.net now.
No comments:
Post a Comment