What Can I Do About ALL this DEBT?

Posted Friday, January 29th, 2010. Filed Under Financial Empowerment

Time To Consolidate

For months now, Sandra and I have been discussing how to organize your finances by likening it to “your closet”. Our intention has been to break things down to the simple so you understand certain financial terms, how to read statements, and so on, so that you can make sound financial decisions in your best interest. We know that by taking back your power you are no longer threatened by this or at least less threatened.

It does take baby steps and for some this process of looking in the closet can seem overwhelming. So we want to break this process into even smaller steps by choosing topics and providing tools and suggestions that we hope will guide you to a better financial position. It is said that the journey begins with one small step under your feet. (I really paraphrased that!)

Let’s take the first step together. This week we want to focus on your Larger Debt: Credit Cards, Mortgage, and Entertainment AND then learn how To Take Your Bills And See Where You Can Consolidate Them.

1. Credit Card Debt – We have talked about this before. You can call you credit card company and see if they will lower their rate. Otherwise you can check to see what other cards there are. Make sure you look at the fine print of switching. The larger question is how are you using this card? This is something that you want to use only for what you can pay off at the end of the month. By consolidating you will be able to pay this down. Credit card used wisely can help you build a credit rating.

2. Mortgage Loans & other Loans – In the US the housing market was really affected last year during the “mortgage and loans crisis”. Everyone is at fault here – banks loaned to people that really were not in a position to carry a loan, people borrowed thinking that their property value will keep going up and will always be worth more than the loan itself and/or that they are making such good money only to lose their jobs.

I suggest you call up your mortgage company and talk to your representative on how they can lower your monthly payments. I personally did this and I lowered my monthly mortgage by half! Otherwise put together a plan when you consolidate that will move you on a path to becoming deb-free!

3. Entertainment Expenses – this is one of the hardest ones to track for there is so much “just spending without thinking” that is done.
Where can you cut down your spending? If you are like me and Sandra and love to socialize, start by going to less expensive restaurants to eat, or higher end yet less frequent. You can invite some of your friends over for a nice home cooked meal. Rather than eating lunch out every day for $5-10/day, bring lunch 2-3 times per week. Also, rather than stopping at Starbuck’s for a morning coffee, drink one at home and try and cut down to 2-3 times per week. These are habits that seem hard to break. You will find two things, first is that you are saving money by nature of cutting back, and second you can substitute some of these choices with more healthy ones, for instances, drinking more water, taking a walk at lunch with a friend/colleague rather than going out for lunch. You will enjoy the conversation and you will also be incorporating some exercise- good for your body and mind!

A suggestion is that the next time you want to buy something, stop take three deep breaths, think about it and ask yourself is this going to support my financial decision to be more savvy? Instead of your finance controlling you, you control your finances. As always we love to here from you.

Check and see what government programs exist.

The greatest awareness is KNOWING THAT IT CAN ALL CHANGE WITHIN 6 MONTHS OR A YEAR! It begins with you taking accountability and responsibility and then make that choice. We are here to support you along the path.

All our best,

Maritza and Sandra

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