I used to be a couple and utter scatter brain when it came to money. If I wanted something, I usually bought it, without thinking of the consequences to my bank account, or credit rating for that matter.
This lead to credit cards, loans and ended up in a situation where I could barely keep my head above the water; but my head was buried in the sand. After getting paid one month and realising the day after that there was barely anything left, I realised that something needed to be done.
I was getting to a stage where I needed help paying bills, my credit card bill was sky high and the dollars coming in did not match what was going out. I managed to remedy the issue and my debts over the next few years and picked up some tips along the way which I thought I would share with you today.
Find out just how bad it is
When you realise that you had gotten yourself into a situation, everything has to come out. Find out exactly what you owe, just how many credit cards you actually have, what you are spending your money on every month.
The first thing that I did was to look over my bank statements and credit card bills for the past six months to look at what I had been buying. I made a chart with my justifiable expenses on one side, and the extravagances on the other. I bet that you can guess which side had more entries.
Make A Budget
Sounds basic, but when I say make a budget, I mean for everything. Break down every cent that is coming in and list everything that has to come out and on what date. Make a 30 day planner and write down when bills are coming out and how much for. If you are buying your lunches, make them instead. STOP BUYING EXPENSIVE COFFEE SHOP COFFEES!
Be honest with your credit providers
When I realised just how much I owed to my credit card providers and loan company, I started to look at debt management companies. Many seemed to offer the same sort of service, for a fee of course, which involved going to your credit providers and negotiating a lower monthly payment and a halt on interest. I decided to cut out the middle man and go to them direct.
I managed to get my credit card company to freeze my account and stop any more interest going on. I was completely honest about what I could afford and made a payment plan with them which was management. Remember, they want their money back, what they don't want is you to stop paying completely.
I managed to make a payment arrangement with all of my debtors, with varying degrees of helpfulness from them. But it did ease the situation and enabled me to pay them back faster and without the worry of demand letters and Court judgments.
Save
If you are trying to pay off your debts, can you really save? Yes, but start small. I was given a large piggy bank styled as a fashion boots many years ago and decided to put it into action. I only put the smallest denominations into the boot, pennies, cents etc whenever I had them in my purse. It took around 6 months to fill the boot and I was presently surprised just how much it added up to.
I would like to say that I used the money to pay more off a bill, but I didn't. I did use it to buy someone a birthday present so that still counts, right??
What I also tend to do is take advantage of discount opportunities and vouchers codes from places like Dealsdaddy and Dealsqueen. There are always going to be things you need to buy at some point, so why not take advantage of a discount!
What I also tend to do is take advantage of discount opportunities and vouchers codes from places like Dealsdaddy and Dealsqueen. There are always going to be things you need to buy at some point, so why not take advantage of a discount!
Sell
If you have been throwing your money around for the good few years, the chances are that you own more stuff that even thought. Go through everything and be brutal. Sell what you do not need or had forgotten that you had bought. Stuff will only ever be stuff and does not enrich your life, or your bank account!
Finally, don't beat yourself up about it. It does not help.
You got yourself into that situation and you will get yourself out. It will take time, effort, concentration and a stranglehold on your finances for a while, but you will get there.
Fast forward a few years and my finances back in order and I am saving for the first holiday abroad in 8 years. Time for a long awaited cocktail by the beach. I think I have earned one.
*Collaborative piece
