1 - Managing Debt
stop - take financial stock
Have a look at your
Grab a pencil and a pad of paper - make sure the pencil has an eraser.
You will want a calculator, too.
Divide one sheet of paper
into 2 columns
List all of your monthly income - sources and amounts - in one column.
In the 2nd column list any money assets you have - ie. savings, cashable bonds,
cash in the coffee can, all of it.
Divide another sheet of
paper into 3 columns
List all of your monthly household and maintenance expenses in one column.
In the 2nd column list all monthly loan payments - ie. cars, mortgages, student
loan, repay loan from Aunt Annie, all of loans.
In the 3rd column list all of your credit cards and the amounts owing for each
credit card debt and an beside each balance owing write the minimum monthly
Doublecheck your finances
and debt lists
Take a little break, have a cup of coffee and sit back and look at your lists,
is that everything, is each finance and debt list complete. Don't forget any
birthday money that you know you are going to get. Don't forget there's car
insurance next month or medical insurance coming due. (divide such amounts by
12 and put them on your household expenses list)
STEP 2 -
assess the financial situation
At this point one of two
things is going to happen - you are going to realize that you are coping - that
the monies in are covering all of your financial obligations, even if there is
not an attractive amount of disposable income after all the monthly debt is
cleared or you are going to realize beyond a doubt that there is a shortfall
between the two.
If you are managing, but struggling, make a hard determination - let's look at
those credit cards. What kind of debt are they packing? Dinners, lunches,
If there is a shortfall and there is not a reasonable solution at hand then
consider a few things - can some of those expenses reasonably be trimmed away,
can you dispose of any of the assets (ie. a 2nd car) and lower your payments,
lower your overall debt.
STEP 3 -
get help with debt, get help with finances
often than you think - the solution is right in front of you. Managing debt and
finances is something most people can do, become financially accountable to
your own life. If you are overwhelmed and need help, consider financial
counseling. There is qualified and experienced financial help available.
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