Long before we officially reached the recession, many of us already had problems stemming from the deadly combination of too much personal debt and too little income to bring the problem under control.
Easy credit and the plastic-purchase revolution made overspending a way of life for those of us who had enough difficulty balancing our checkbooks before we were able to pay for virtually everything with a credit card. Those purchases that had always been done with cash, like groceries and fast food, started accepting plastic, and few of us recognized that the privilege of buying milk, bread, and double cheeseburgers demanded outrageous interest.
No one needs to pay 20% interest for food.
The economy boomed, but many individuals went bust just because they did not follow some simple rules for spending money, and now the problem of a few has become epidemic. Foreclosure and the loss of personal property and savings are in far too many futures.
To survive this downturn and to grow financially when it eventually ends demands discipline. Here are five simple steps that will get you through the tough times and make your financial future bright.
Pay yourself first.
Regardless of your income level, this single axiom is an absolute must. Before you send one cent to the bill collectors, set aside a minimum of five per cent of your net income, and do not touch that money for any reason until it reaches a level equivalent to six months’ income, and then only to invest it in something that allows your money to make money.
2. Cut up your credit cards.
Right this minute, stop making any purchases on credit. Use a bank debit card if you must, but better still, use cash. On-line purchases can be made many other ways including PayPal.
There are many services that require a credit card and will accept no substitute. For those, keep a single card and pay the balance off monthly.
3. Make a budget.
It is amazing how many households simply do not track their expenses and have no idea of where their money went. Keeping a budget these days can be as simple as spending a short time at your home computer, almost all of which come with rudimentary software that will walk you through everything from balancing a checkbook to paying regular bills automatically online.
For those who don’t feel comfortable in the modern electronic age just yet, a ledger still works wonders for knowing where your money went and for planning to stay solvent.
4. Invest in yourself.
Make everything you do that involves money work to your benefit. When you save 25% because you found a bargain on a television or any major purchase, pay yourself the difference in a savings account. Always have enough capital on hand to pay the full price before you buy, and pay yourself for being thrifty.
Find out what specific training will move you up the salary scale at work, and invest in that training. Some firms will help with tuition.
5. Get help.
Last but definitely not least, use debtliberty services to get your bills under control. Credit card companies and loan officers work endlessly on milking every cent out of creditors, from hidden boosts to interest rates to bloated charges for insufficient funds at your friendly local bank. You wouldn’t walk into court without a lawyer on your side; the same logic applies here. Trust yourself to professional help. You will be amazed at just how much cash you will save. The service of a debtliberty specialist is well worth the investment.