Find Out How I Got Out Of Financial Hell With This Practical Guide
The thing about money is that some people just don’t know how to handle it! They might spend it until it runs out, and then panic when it comes to paying their bills. I’m embarrassed to admit that I was a bit silly with my money in my younger days.
As a result, I racked up quite a lot of debt and pretty much done a lot of damage to my credit score. Fast-forward several years and I am now in a better financial position. After I pay my bills each month, I have a modest amount of cash I can spend on “fun” things.
So, how did I get myself out of my financial hell, you may be asking? Well, it was a rather long process, and I’ve had to learn a lot about stuff the hard way. I’ve also learnt a lot about myself in the process. Today I would like to share my experiences with you in the hopes you can find them useful.
It’s important to note that even the worst of financial situations can get sorted out. Don’t ever feel like you’re alone. Otherwise, you’ll end up becoming depressed and in a dark place.
There are plenty of debt charities that you can also speak to for help and advice, and I recommend that you do that. Today’s blog post is only an account of what I did to improve my finances.
Taking stock of things
The first thing I did was to calculate just how dire a financial situation I was in. It’s a crucial first step because you need to know how bad things are before you can make them better. The way that you do this is up to you.
In my case, I used an Excel spreadsheet to make a list of my debts but you can always use pen and paper if you prefer. Sometimes you might not have the exact totals to hand, so here’s what to do for some types of debt:
- Credit Cards – log into each online account and get an up-to-date balance;
- Loans – do the above or call each lender for the balance outstanding on each loan agreement.
You will also need to write down how much you pay for each debt, and how often it gets paid. I found it useful to write down the amount and day of the month each bill gets paid.
Next, you need to begin the process of terminating any non-essential subscriptions or services. Examples include things like cable TV, Spotify, and charity donations.
It’s important that you cut down on the amount of bills you must pay each month. Many people don’t realize that they pay a lot of money for things that they don’t need to survive!
If you do a lot of shopping on the Internet, it’s likely you pay for stuff using services like PayPal. Log into such accounts and cancel any recurring payments.
Cut back on your social spending
One thing I found was that I spent a lot of money eating out and doing fun things like going to the movies or the gym each week. All those expenses aren’t essential to your well-being, and they can rack up a lot of debt.
Instead of eating out, find ways to make your meals at home more attractive. Watch movies for free on the Internet or on TV. And use public services to keep fit instead of paying for a gym membership. Those are just three examples of how I cut down on my social spending.
I know it sounds a bit depressing that you have to give up doing some of those things. But, it’s just short-term pain for long-term gain, as they say! You don’t have to do that forever; it’s just until your financial situation improves. It’s also an effective way of reducing debts and taking stock of your finances.
Sell things you don’t need
You might not think it, but your home is a treasure trove of valuable items! I am willing to bet that you’ve got lots of items that can fetch a good price on places like eBay or Craigslist.
If you’ve got some gadgets or other items you seldom use, now is the time to sell them. Doing so will benefit you in two ways. First, you’ll have some financial breathing space. And, second, your home won’t have so much clutter in it!
Cut back on your grocery spending
Are you someone that likes to spend a lot of money on fine foods and drinks? If so, you’ll need to make some sacrifices there too. I can guarantee you that your grocery bills could come down by quite a lot if you changed your spending habits.
In other words, buy cheaper, non-branded products. You might not know this fact, but some of those products are identical to the branded ones! It’s not unusual for brands to sell products under a supermarket’s own brand name. The quality of the product is still the same; you just end up paying less for it!
You should also take advantage of discount coupons and special offers on bulk-buys. One of your biggest expenses will be grocery shopping, especially if you’ve got a family in tow. Now is the time to review your spending and cut back on luxuries.
Pay less interest on your debts
Sometimes you could be paying high interest rates on your debts when you need not do so. It’s worth finding out if you can transfer some of your debts to new loans with lower interest rates.
You should also find out if it’s possible to get a new loan and transfer your credit card debts onto them. As you know, credit cards are a bad form of debt because you pay interest on top of interest. It could take you a lifetime to pay off a credit card if you’ve got a large balance!
With a loan, the interest rate is just fixed, and you know what you’re paying. The balance always goes down, not up!
I hope you’ve found today’s blog post useful. Thanks for reading it.