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.
You will start by collecting all your credit reports, bill payment statements, and credit card statements, mortgage and insurance records. Locate debt worksheets on the internet to help you work. All of these steps will be taking place 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.
ALL of your financial obligations must be recorded in writing. This will be important for the money management part of the plan. All credit cards can be listed according to highest to lowest interest rate. Write down the minimum monthly payment on 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.
Next, decide which loans and credit cards you can pay down in the order you can do so. When tackling the first pay as much as you can, and pay minimum on the others. When number one is finished, apply that amount to the next and so on. This is "tough love" money management style and will be needed for quite awhile.
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.
Your current situation was not something that "happened "to you. You are responsible for creating it and you are responsible for repairing it. It wasn't created overnight. It won't be fixed overnight. - 15224
You will start by collecting all your credit reports, bill payment statements, and credit card statements, mortgage and insurance records. Locate debt worksheets on the internet to help you work. All of these steps will be taking place 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.
ALL of your financial obligations must be recorded in writing. This will be important for the money management part of the plan. All credit cards can be listed according to highest to lowest interest rate. Write down the minimum monthly payment on 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.
Next, decide which loans and credit cards you can pay down in the order you can do so. When tackling the first pay as much as you can, and pay minimum on the others. When number one is finished, apply that amount to the next and so on. This is "tough love" money management style and will be needed for quite awhile.
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.
Your current situation was not something that "happened "to you. You are responsible for creating it and you are responsible for repairing it. It wasn't created overnight. It won't be fixed overnight. - 15224
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