subject: Debt: Get Serious about the Business of Money [print this page] Nothing gets us deflated and running for the hills than hearing that we have debt. Debt comes in many forms such as payments for mortgage, unpaid bills, all the loans you made, and even credit card payments. Debt is so widespread that we hear and see people all around the country drowning in them. How can we stop debt from destroying our finances?
Spending and the Power of Plastic
You have to stop your spending. We all love to spend on things that we want, we need, things we don't really need, our got-to-have items especially all the latest craze and trends. This is the practice that we call overspending. There are people who don't have money but yet they can afford to buy almost everything they want. This is the practice of swiping plastics. We spend the money we don't even have. Overspending and indiscriminate swiping is the reason why some people don't have their finances straight as their spending boomerangs back at them in the form of debt.
What can you do? Always, always write, observe and review, and finally minimize your expenses. See what you can root out, look at the things you've purchased and determine if it is a want and need. You're going to want to have "needs" first and remove the "wants".
Never use your credit card except for emergency situation, because if you use your card to buy something, then one reason for that is you possibly cannot afford the item you're getting. If you have several credit cards, it's a wise decision to cut it all up and leave just one for those pressing emergency purposes. The card that's left should have low interest. Try to call your credit card company and see if you can negotiate their rates. Or you could research for credit unions that have low rate and more likely to maintain the same rate even when all others go high.
Budget and Saving
Budget is your best friend, and sticking to it faithfully will benefit you in so many ways. Writing out the budget ever month helps you plan so you don't get stuck in the middle of the month with your paycheck almost depleted and you're trying to tap into whatever finance source you can get your hands on. Creating a budget, doing a grocery list, calculating how much money you owe for bills and payments, and reviewing your checkbooks will increase your chances of putting your money where it should go, and allocating it correctly.
It's always a must not to deplete your income with payments and necessary purchases. Don't live for the now. Live for the future. Always put away as much amount as you can. Make an emergency saving fund to help ease the burden in case something unexpected comes up. It's now a must to save as much as $50-$100 every month for your emergency savings, and around $100-$300 for your savings.
Pay What You Owe
Debt is not going to go away when you don't pay them. Always make necessary steps and more to throw money on the debt hole that you've made for yourself. Try and see if strategies like Debt Snowballing or Debt Consolidation works for you. One of the popular choices is debt consolidation, meaning that you streamline all present debts into one large debt. It helps people feel less overwhelmed by all the different kinds of loans that they have to pay. A relatively new strategy would be debt snowballing, which just means that you pay the minimum payment and something extra to the debt with the highest interest rate and pay minimum to all the others.
Pay your debts now, and never get behind on the necessary payments. The late fees will drain your money even more and it pushes the balance you owe over the set limit so you end up with even more fees. If you manage to keep it up, you will see a gradual but steady decrease in your debt.
There's no one but yourself that you can blame for the debt you've accumulated, so it's up to you to solve the problems that you've managed to entangle yourself in. Manage your debt, manage your money and secure your financial future now!
Debt: Get Serious about the Business of Money
By: David Stack
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