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 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 insightful 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has been withdrawn from millions of homes in the last few years.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, it's 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 home based business, with 2 houses and excellent
re-established credit.
In other words, it can be done.
Pay-off-debt-now.com is run by Drew Harris and is a
one-stop-shop web portal for those facing crushing debt issues. Multiple pages of
resources, referrals and tools. Expert advice on credit cards, loans and avoiding
bankruptcy. <http://tinyurl.com/4bbum>
http://tinyurl.com/4bbum