Millions of people are buried in
credit card debt with rising
interest rates and mortgage payments going through the roof!
Without a financial freedom plan, we might even lose our homes.
Financial stress is a common topic around the dinner table all
over our nation! What can we you to relieve this stress? Since
most of us don't have a rich uncle to rescue us from our
financial mess, we must formulate a financial freedom plan.
First, get organized. Before starting any financial freedom
plan, find out exactly how bad your debt really is. Are you at
the point of bankruptcy or just need to reduce unnecessary
spending?
Throwing all those bills in a drawer, forgetting they exist
doesn't count as a financial freedom plan. Every month, they
just keep showing up in our mailboxes again.
One thing I have noticed is that a lot of people have what I
call "magical thinking". They complain about their debts. When I
ask if they have a financial freedom plan, they say they're
waiting for their tax refund. Then they go shopping and charge
more. How many different ways do they think they can spend that
tax refund? Watch out for that "magical thinking". It's
dangerous!
If you don't at least make the minimum payment every month on
your credit cards, you will soon have a more serious problem.
Next thing you know, you will see those extra charges for late
payments adding up and then your interest rate will go sky high!
Not to mention your credit will be destroyed!
Obviously, you need a financial freedom plan. Let's get started
with becoming debt free.
First, gather all your regular bills, mortgages, credit card
statements, and any other debts. Find a working pen and
notebook. On the top of the page, write FINANCIAL FREEDOM PLAN.
List all your regular monthly bills on one side. Also average
out your other household and gasoline expenses. Take yearly
expenses and divide by 12 to determine cost per month.
This would include taxes on your house, house insurance, perhaps
even car insurance. On the opposite side of the page, write down
your monthly income. Subtract your total monthly expenses from
your monthly income. Hopefully, the result is not a negative
number! Now we are making progress on our financial freedom plan.
When it comes to your credit card debt, add all balances up to
see exactly what you owe. Have you considered the possibility of
doing balance transfers to a new card with a 0% internet rate
for 12 or 15 months? Consolidating several credit card balances
in this way could save you tons of money and reduce your stress.
If you do this type of consolidation as part of your financial
freedom plan, close out those cards as soon as the balances have
been paid. It is better not to keep them around and be tempted
to start using them again. There will be a small fee for doing
balance transfers, but it will be worth it discontinue
accumulating interest and lower your monthly payments.
You may have to cut your spending to only things that are
necessary. Of course, you have to put gas in your vehicle, but
you don't have to stop for fast food on the way.
Although you won't starve, you may have to quit eating steaks
once a week for awhile. One-pot meals and leftovers can save you
some money. Check out websites where they offer free recipes for
the budget conscious consumer. You can eat healthy and hardy for
less!
Put your vacation on hold for now. Spend some quality time at
home with the family. It's free and your family will thank you
for it! Instead of buying or renting movies or going to the
theater, make some popcorn at home and check out what movies are
on TV--perhaps play a game. Get creative!
