Are you broke, in debt, and don’t know where to start to get out of the financial mess you’ve created!? If this is you, trust me when I say that you are not alone! I know that it may feel like you’re the only person in the sea of your peers drowning in debt, whether it’s from student loans, car loans, mortgages, credit cards, gambling, etc. but I repeat YOU ARE NOT ALONE!
Actually, according to credit.com and sources such as Pew Charitable Trust Survey and CNBC, almost 80% of Americans have some type of debt and 62%-66% of American have less than $1000 saved. But let’s be real, I’m sure you aren’t reading this post because you’re super interested in financial stats or want to make sure you’re staying on par or “keeping up with the Joneses” . You’re probably reading this because you need help, you’re looking for answers, ideas, guidance and just need to know where/how to start. Perhaps you’re just stressed, you’ve hit rock bottom, or you just want more than “just enough” to get by each month. Just by taking the initiative to read this you are one step closer to a positive change!
Kulim The first step to any change we wish to see in our lives starts with a change in our mindset. Your attitude is what sets you apart from the 80% of Americans who are in debt and are content being there! So congratulations on taking the initiative to change, but the right attitude alone won’t carry you across the finish line!
The next step to turning around your financial position is to remember not to get too down on yourself! You are human and live in a very materialistic world, many people are drowning in the same debt as you behind closed doors. Now it’s time to “get real about your current financial situation.”
Getting real about your current financial situation means that you are putting everything into perspective. This is one of the hardest steps because it demands that you be honest with yourself, by looking at the cold hard numbers (how much debt you really have or how little you actually have saved). Always remember that “numbers don’t lie.”
Action step #1- Grab a pen and paper and write down all of your loans/debt/anything you owe outside of a monthly expense (write out the amount of each debt and then total it all up). If you don’t know some of the figures its time to get on the phone with the provider, pull up that old account online, or dig through your junk drawer to find that old bill. This step could take a few hours, but work through it because it is important before proceeding to the next step. Once you have your list, reorganize it from smallest to largest debt.
Second, after getting real about your situation and knowing your numbers (knowing the total amount of debt you have down to the PENNY) the next step is to get serious. By serious I mean a complete financial detox and total assessment of your thoughts regarding money, debt, and saving for your future. Right now you might be saying “Carmen, I get it but what do I need to do? Give me a task list! Ok! By financial detox and total assessment I mean the following:
Nurlat Action step #2-
A.) Sit down and write out all your debts from smallest to largest (action step 1).
B.) Find out how much money you actually take home (the money that gets direct deposited after taxes, 401ks, and health insurance, and all that jazz is taken out)- your actual income.
C.) List out all your monthly expenses (Mortgage/Rent, car payment/insurance, cable, water, electric, gas, groceries, eating out, shopping, etc.) you want to list anything you regularly spend money on and write an approximate dollar amount next to each item, this includes coffee, getting your nails done, tolls, membership fees etc.
Action step #3-
Self-Assessment. Think long and hard about these questions:
- How does this amount of debt make make me feel?
- If I get an unexpected flat tire and don’t have the money to cover it, how will that make me feel?
- Will it stress me out? Does not having anything saved stress me out?
- Do I spend all of my income each month?
- Do I have any reoccurring monthly expenses I can cut out?
- How much extra would that give me monthly?
- How did I get into this situation? What have I learned from all of it up until this point?
- What can I cut back on and where can I reallocate that money (savings or paying debt)?
All of this might feel like information overload, over whelming or scare you half to death, but you’re on the right track to being able to breathe again. Now for the most important part- TAKE A DEEP BREATH and tell yourself YOU’VE GOT THIS!!!
You did not get into debt over night, so don’t expect to get out of it over night. It won’t be easy, but I promise it will be worth it when you’re ready to make the plunge!
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Addrienne says
Hello There. I found your blog using msn. This is a very well written article. I will make sure to bookmark it and come back to read more of Dan Frazier: Campaign finance: The end of Democracy | Daily Camera: Letters to the Editor . Thanks for the post. I will deiieftnly return.