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5 Steps To Getting Your Finances In Order
by: Drew Harris
In our world of dizzying change, nothing is more true than
the time honored statement that circumstances always change.
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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of dollars worth of equity has been withdrawn from millions of homes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.
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.
Other articles you may find interesting:
Michael Schatzki is a master negotiator who, for over 20 years,
has provided sales negotiation training and coaching for thousands of people
in the U.S. and globally. More than 75% of Mike's programs are for satisfied,
repeat customers. The Negotiation Dynamics? system really works. Check out all
of Mike's articles at: www.NegotiationDynamics.com.
Mike can be reached at (888) 766-3530.
*The articles published on this site undergo our review
process. We found the information in this article to be very useful and informative.
The source website does not necessarily reflect our website. We have linked
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