Why is it so hard to get out of debt? Could it be that there is a cycle keeping your hands tied? If you’re like me then it seems that the victory over debt is hard to come by. Though it may feel like it, the debt cycle isn’t a never-ending snake eating its tail. Here is the financial path that freed me from the serpent.
The Situation:
When I started a second mortgage I had the best of intentions to stay frequent on my payments, however a second child coming, and some unexpected emergencies quickly burned through my rainy day fund and
left my bills to sit stale on the dining room table. This situation isn’t unheard of for many homeowners and parents. It was easier to go out a grab some food with friends that it was to stay current of my mortgage payments.
Spending Habits:
I mentioned eating out with friends, and it was when I realized where the money was going that I began to become worried. It seemed that this wasn’t the only perpetrator in my debt crime. There are many things that came up in my life that I was financially unprepared for. We all have our excuses. But it was my apathy about debt that put me here. I think it is what gets everyone into this situation. So I started to fix my apathy by looking through my bank statements and noticing the glaring errors within. You’ll start to see exactly where your money goes and how frivolous your habits really are.
Realign your Spending
Make a spending plan. You already have the bills, the income, and the needs. You need to align these into a strategy or this debt will never go away. Consider talking to a financial aid, or debt consolidation service. You can quickly figure out the best strategy to win with them. Make sure to do your research and find a safe debt to income to spending ratio. If you are getting offerings from credit card companies for new deals or rates, or company specific cards and signing up, then you’re already setup for failure. Consider keeping only one main credit card, and use I only for real emergencies, way after your rainy day funds run out.
The Future:
Once you find a way to get yourself out of the debt cycle, and are able to save money again, make sure you actually save. Planning for the future is the best advice I can give. Start setting up a retirement plan, and really focus on making that rainy day fund robust. The biggest aspect here is to realize what you can spend and not exceed that. If you can follow this advice, you’ll have a wonderful financial future. Just keep making the most of your money, and getting the biggest bang for your buck. Again, this doesn’t mean getting coupon crazy, but rather is a message for those of you who don’t seem to know where their money goes. These days, people have a huge number of bills on their tables, and if you can take control of them, they’ll take control of you.