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Planning for Debt Management Budgeting for Debt Management
Of course, the earlier you make a financial plan (think budget), the better and easier life will be. However, if you have been conducting your financial life without a plan and find yourself in a real financial bind, it isn't too late to make a budget now.
If each payday, you are only paying the creditors who are screaming the loudest, you need a plan, my friend.
There are many sites on the Internet that have forms that guide you through the budget-making process. Choose one that looks like it could work for you.
The first thing to do as you follow the instructions for making a budget is to list the bills that are for the necessities of life....food, shelter, utilities, transportation, and clothing. These expenses are not optional. After you figure out how much just covering life essentials comes to each month, the remainder is what you have for paying other bills. This is what we call disposable income.
If the total of your disposable income is less than the minimum payments that you are being required to make each month on your secured and unsecured debts, then you are going to need to make some changes and maybe get some help.
The first thing that you can do is contact all of your creditors yourself and try to make arrangements for paying them in a time frame that you can live with. But there are other options.
One option is to contact a debt management company. These companies can help with your unsecured debts (credit cards). There are both paid for and free debt management services available.
Another option is a consolidation loan. This is almost always in the form of a second mortgage, but it could be the answer that you are looking for.
A third option is a debt negotiation company that can negotiate with your creditors for you and get settlements of debts for greatly reduced amounts.
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| Debt Management Is a Good Thing Debt Management Experts
People who work as debt management experts go to school for that sort of thing. Many spend four years or more getting college degrees that identify them as experts in the money and debt management fields. And they are experts, there's no doubt about it.
The best of the debt management experts and debt management teachers, however, are those who have learned to manage their personal finances and their personal debts, and then passed that knowledge along to their children.
Those who actually do it are the experts, and they are the ones that we need to learn from to avoid having to visit with a well-educated debt management expert because we have gotten ourselves into financial hot water.
As I look around at expert debt managers (those who successfully manage their own finances) I find that they have many things in common. They don't all do things exactly the same way, of course, but the structure in which they manage their finances is basically the same.
1. They save first. Those people who know how to save very rarely get into financial trouble. Sure, they can. Life can throw some pretty hard curve balls....the loss of a job or a major illness. But unless their financial trouble is caused by an outside force they will not get themselves in debt up to their eyeballs.
2. They live within their means. They do not base their spending upon what their friends have. The neighbors might buy a new car, but that will have no bearing upon whether they do or not.
3. They all have budgets. Not only do they have budgets, but they live within the constraints of that budget. They do not make impulse buys. If asked, they could tell you how much is spent each month on food, shelter, clothing, utilities, and transportation. |
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| Online Debt Consolidation and Debt Management Services Debt Management: Getting the Priorities Straight
Using half your paycheck to buy lottery tickets in hopes of winning millions instantly is not a satisfactory debt management plan. Successful debt management is based upon truth, reality, and keeping your priorities straight.
The necessities of life must come first when you make your debt management plan. You need food, shelter, utilities, transportation, and clothing....and pretty much in that order. After the total cost of these necessities is subtracted from your bring home pay, what's left is your disposable income.
How much you spend on each of these necessities will determine the total cost of your necessities. When you cut the cost of any of the necessities, you will have more disposable income and when you add to the cost of the necessities, you will have less disposable income.
My daddy summed it up pretty well for me. He said, “The less you spend on what you have to have, the more you will have to spend on what you want to have.”
You have to make your own choices, of course, but here are just a few ideas that might help:
1. Food: It costs less to eat at home than it does to eat out.
2. Shelter: Less space costs less money....usually.
3. Utilities: Raise the thermostat by two degrees in the summer and lower it by two degrees in the winter. Turn off lights when you leave a room. Don't leave water running.
4. Transportation: A five-year-old car will take you to the same places that a new car will take you.
5. Clothing: Clothes purchased at discount stores costs less than clothing purchased at upscale clothiers.
Debt management is all about getting your priorities straight and making choices. Priorities are nonnegotiable, but how much you spend on them is negotiable. |
Related Topics: Debt Management and Family Crisis,
Debt Management Experts, American Version of Debt Management
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