Before you get out of the debt crisis, you must first confirm the problem. When you find the problem will determine how much effort you must make to correct it. In any case, the debt problem should be given priority. Money problems are not automatically corrected.
There is very little money in the savings-savings account. Without a savings account, the risk is further increased.
Credit card – how much credit is owed? If you have used up or almost used up your credit line, there are debt issues that need to be resolved. Note the interest rate on each card. If you attack higher interest rates first, there is more money to save in the long run.
Juggling money – do you choose which bills to pay per week? Family needs are prioritized, but how long does it take for others to wait? Are you paying late fees or overdraft fees because the salary pays all the expenses during the payment period?
Alternative Loan – Have you taken at least one payday loan or cash advance from your credit card to pay for priority or other debt? Both options are expensive. If these loans are your only source of emergency help, then the debt crisis is an advanced issue.
Debt burden – If your total debt [minus the mortgage] is 20% or more of your monthly income, that is a problem. The budget can usually handle 10-15%. This amount does not include car payments. Make sure that the cost of the car does not jeopardize your finances.
A good work budget will easily include homes, vehicles, utilities, gas and food. If the budget does not include these bills, plus some extra savings and other unexpected expenses, you will live in an unaffordable lifestyle. Identify areas that can be reduced and redirect financial issues before a disaster strikes.
– Stop using payday lenders altogether. Even if you still need a month to pay off your debt, you have to do so. Every few weeks your budget needs to invest a lot of money elsewhere.
– Hide credit cards until you can pay off your debts or at least pay off your debts. Do not cancel them unless absolutely necessary. Cancelling a credit card will hurt your credit score in different ways. If you need to, please cancel those recently purchased, because the longevity is favored by the credit bureau.
– If you change your car with a cheaper model and a lower payment, will your budget be smoother? How about a better model of gasoline mileage? Cheaper models have lower maintenance costs than similar models. Long-term costs must be considered when purchasing a vehicle.
– Do you need to reduce the size of your home to make your spending affordable? Smaller homes will also help reduce monthly utility bills. Don't forget to look for affordable property tax rates in the community.
Break all bad spending habitsfrom
. Paying on time is prior to the sale price.
Redo the budget. Now, you have a hindsight and need to make better, more realistic decisions for better implementation of the new budget. If you need to make a payment plan with a creditor or payday credit, do so. These companies are willing to work with customers who are trying to pay their debts.
Once the debt crisis is over, don't restore your past habits. It's time to plan for your future. Use newly discovered cash for university funds and retirement savings accounts to prepare for future expenses. The sooner you start saving, the longer it will take to invest.