Do This And Have Money Left Each Month!
Lack of Financial literacy in the United States is at epidemic proportions. Debt burdens are the highest they have ever been in the history of the country. Home foreclosures are setting new records. Banks are legally able to charge usurious rates of interest which not so long ago would have been illegal except for a Supreme Court decision supporting their right to do it.
The financial reporting on these issues is always looking for a scapegoat. E.g. Foreclosures are high because banks were just giving away money and mortgage brokers are unethical. While there is no question our financial institutions have lost there moral compass. Could it be we need to shoulder some responsibility as individuals? Of course, things happen. Sudden illness, divorce, loss of a job, even I spend money to feel better. Any of the above can create a sudden financial catastrophe. The problem is we live from day to day, financially speaking. Money comes in and money goes out. It is the rare person who is prepared. When times are good, we act as though it will stay that way forever. Spending money we do not have for things we do not need but rather want has simply become to easy.
Believe it or not, there are only three things we must have to live in this world. They are food, shelter and protective clothing. Think about it for a moment. Looking at things in this needs context, will change your point of view in terms of how you spend your money.
If you are reading this chances are good you have a debt problem. Take a moment and consider how it came to be. Don’t just say, well that’s easy, I lost my job. Ask yourself, could I have been better prepared for this unexpected situation? Now that I lost my job have I formulated at least a basic plan in terms of how I will pay my bills? What will be the most important to pay and the least important? Is there a way to stop the creditor calls? Do I have a budget? Is the budget realistic? Which bills are my must pays? The answer by the way is that the must pays are your secured debts. Mortgage, car. Credit cards are not secured debts. Your home cannot be sold on the courthouse steps if you can’t pay them, same goes for medical bills and phone bills. Certainly, I am not suggesting you ignore these. They must become part of your new plan. Your new plan must be, how do I get things back in order?
Here is the good news. As badly as you may be feeling right now, it is possible to get things back in order and get out from under debt oppression. Short of contacting us and having a free counseling session with one of our counselors, here are some suggestions.
Make a budget-you can use. Here is a great budgeting software to get you started. http://www.personal-home-budget.com/
Be realistic when you do it. I suggest the following method for tracking your money.
Enter what you think you spend in each category on the worksheet. Then, print it out.
OK, now the real fun begins. Over the next 30 days (try to start at the beginning of a month. Record everything you spend in a small notebook you will carry at all times.
If you buy a soda in the vending machine, PLEASE, write it down. Use your credit
card statements and monthly bills as they come in to record the other expenses you have.
At the end of the 30 day period fill out another budget sheet. Compare the two. My guess
is you will be in for an eye opener. The second sheet will show much higher expenses than the first sheet.
For the final step, analyze the second sheet and take a hard look at where you can cut back. Remember, things you can live without must be at least temporarily eliminated.
If that means cutting back to basic cable, than do it! What about going out to eat? Do you
Use coupons to shop? After you make the changes, do the exercise again for another 30 days. This will set your budget in place. I guarantee that if you do this exercise, you will gain control over your money, and become self empowered to live a debt free life.
Written By:
Steven Ciantro
Credit Counselor
American Debt Enders
516-476-5903
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