One day you realize that you are in a serious personal financial disaster situation. If you want to avoid a situation that is so out of control there is no way out, you need to make the effort and take the time to get your money management and credit use habits back on track. You don't need to rush into "debt consolidation" or "home equity loan." You can work out a strategic repair plan for yourself.
Round up all credit reports, bill payment and credit card records, loan and mortgage records. You can find debt worksheets on line that will assist with making your plan. Most likely sections of your planning will be occurring at the same time.
Make sure your credit reports are accurate. This may involve some written communications with one or the other of the three major credit bureaus. Be persistent.
Put in writing all of your financial obligations. You will be particularly concerned with credit cards and perhaps small loans. List the cards with highest to lowest interest rates in order, and the minimum payment for each card.
Figure out your disposable income. This is the amount of your salary that goes for necessities such as mortgage, car loans, credit card payments, utilities, other loan payments. When you subtract this amount from your salary, you will have your discretionary income. This is the income you can devote to reducing debt.
Determine which credit cards and loans you can pay down in order. For the first on the list, pay as much over minimum as possible. Pay minimum on the others. When the first is completed, apply that payment to the next in line and so on. This will be an ongoing money management strategy for a long time.
Commitment is definitely needed when you take on this major project. You will have to change your lifestyle. You have to stop living above your means. There will be no more unnecessary spending. Buy only essentials, eat at home, find alternatives to travel. The BIG MUST IS STOP CHARGING.
This situation didn't happen overnight and it won't improve overnight. Is it worth it? This is your financial life. You are the one who has to save it. - 14915
Round up all credit reports, bill payment and credit card records, loan and mortgage records. You can find debt worksheets on line that will assist with making your plan. Most likely sections of your planning will be occurring at the same time.
Make sure your credit reports are accurate. This may involve some written communications with one or the other of the three major credit bureaus. Be persistent.
Put in writing all of your financial obligations. You will be particularly concerned with credit cards and perhaps small loans. List the cards with highest to lowest interest rates in order, and the minimum payment for each card.
Figure out your disposable income. This is the amount of your salary that goes for necessities such as mortgage, car loans, credit card payments, utilities, other loan payments. When you subtract this amount from your salary, you will have your discretionary income. This is the income you can devote to reducing debt.
Determine which credit cards and loans you can pay down in order. For the first on the list, pay as much over minimum as possible. Pay minimum on the others. When the first is completed, apply that payment to the next in line and so on. This will be an ongoing money management strategy for a long time.
Commitment is definitely needed when you take on this major project. You will have to change your lifestyle. You have to stop living above your means. There will be no more unnecessary spending. Buy only essentials, eat at home, find alternatives to travel. The BIG MUST IS STOP CHARGING.
This situation didn't happen overnight and it won't improve overnight. Is it worth it? This is your financial life. You are the one who has to save it. - 14915
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