Some of the topics that will be addressed this month are...
- Starting and Keeping a Budget
- Making Decisions on How To Handle Debt
- Consolidate vs Bankruptcy
Check back throughout the month to see these and other topics being discussed. Ideas to help you, if you are in debt, will also be provided for you to consider.
In the mean time the first step is to find out exactly how much debt you are in. One way this can be done is by gathering together all your account statements and bills. Remember this to get to a good action plan on how to deal with your debt you need to first know how much debt you are in.
After you gather together all of your information the next step is to put it down in one place. I personally use a Microsoft Excel spreadsheet but it can be a bill book or software package that have this feature or even just a writing pad. The important thing is that in one place you have all your debt written down or inputted.
This is a process that I do every year so I will be going through it with you every step of the way. It will take time and a desire to get out of debt and be financially free but this is one goal that if you realize it will make your life better and less stressful.
5 comments:
By now, hopefully, you have found out EXACTLY how much debt you are in but before you do anything read the following articles. They are from the Federal Trade Commision - Protecting America's Consumers. A Government Agency set up to protect us!
Knee Deep In Debt.
Mortgage Payments Sending You Reeling? Here’s What to Do.
More information depending on where you are in debt and credit issues....
In Debt? Facts for Consumers.
Consolidation vs Bankruptcy
If you are considering either one of the above please know that it is a very big decision.
Also know that it is bad out there and the scammers are on full alert. DO NOT get Scammed!! Make sure you research anyone that you are thinking about doing business with. Otherwise you may end up worst off then when you started.
Check them out on the Better Business Bureau, and City, State, and Federal agencies and with any association that may have control or records of their business dealings. For example in Illinois there is the Attorney General Office and the American Bar Association for Attorneys.
Below you will find links that you can use to start your research. Remember there is no one answer that is good for everyone because everyone situation is different. Some parts may be similar but overall everyone situation is different and the approach you should take is to research the information that this best for you, your family and your personal situation.
Debt Relief Options
U S Bankruptcy Courts - Basics
Debt Consolidation: 10 Pros and Cons
If you aren't considering Consolidation or Bankruptcy Suze Orman has a plan that maybe you should consider....
Paying Off Debt
It is now 21 days into February. How are you doing with finding out exactly how much debt you are in? Have you started the research and/or decided how you are going to handle your debt?
I have another great website to help you with your decision making process concerning your debt. Check it out...
Smart About Money
Remember that I am doing this every step of the way with you. This is something that I have proven can work if you work at it one step at a time. In no way can I say that it is done overnight but with every bill you pay off it leave less stress, worry, and a step closer to being financially free.
True Stories About My Debt..
1. In 2008 I paid off 8 bills which 2 being major credit cards with large balances. The important thing to point out is after paying them off I did not open any new ones nor did I add to the balances of any that I left open.
2. Pay attention to your bills and review them! My mortgage had increased over $350 a month. Now this was financially hard on my household along with the increase to gas and light bills that happened at the very same time. So as we struggle to make payments every month we did not take the time to review our bills like we should have for errors or waste. Well it finally got to the breaking point! I sat down and went over every bill one by one. I found that I was paying over $800 more on my property taxes than I should. The city owes me three years of back taxes which I am going to apply directly to my escrow to bring my mortgage down to principle and interest only. I found that I was paying over $526 more on my homeowner insurance because they have over valued my home by thousands of dollars. I found that I did not use my home phone and I could eliminate that bill. I found I was paying for channels on cable that we never watch. I am now saving a couple of thousand a year and about $167 a month. I have more things that I am looking at but this is a great start!
Finally, consider using your Income Tax refund to pay off as many bills as you can!
Question - If you are paying 25% interest on your credit cards unpaid balances and only getting 10% rate of return on your investments and savings are you truly saving anything? We will cover the answer to this in more detail coming up in the March Hot Topic of the Month on Saving. We will also cover the plan I am using 10-10-80.
Next Up - Making a realistic budget that you can live with!
Your "Hot Topic of the Month" is very fitting in these awful economic times. We need to do everything we can to stay on top of our finances or to begin being on top of our money if we haven't in the past.
Okay now it is time to do the final part of the process which is to create your monthly budget. It should be one that work wells for you, your family, your lifestyle and meets your goals, dreams and needs.
If a budget is to strict or rigid then I believe you will not stick with it. As I stated before I have created an excel spreadsheet for myself that I use. You can also find a lot on the internet and in books and magazines. The most important thing is that you find one and start using it.
Below you will find links to some budgets examples but by all means if none of the ones below make you happy then search for one that does but do it because this is the next step to you becoming financially frre!
Simple Budget
ABA Education Foundation
Google Budget Templates
Family, Personal, Monthly Budget
Quicken
Budget and Money Management
Remember when deciding on which budget to use that you take into consideration the time of upkeep, how detailed it is, and if you really will use it. I have provided simple to complex to meet everyone needs so be honest with yourself about the one you pick. I have found that is is always easier to start simply and work you way up to the next level.
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