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Collectively Americans carry 13.29 trillion in debt, which leads to the idea that to some degree we must admit our eyes may be a little bigger than our bellies when it comes to taking on more financial commitments than necessary.
Living paycheck to paycheck is a way of life for some, but for most, it’s a choice. It’s a choice you make when you take on more financial commitments than you can handle whether this is a bigger car, another baby or a larger house. On other occasions it’s purely circumstantial, your partner lost their job, or you have suffered an injury rendering you incapable of working. Whatever the reason, you have the option to try and put things straight, to merge out of your financial jam and to stop living in your overdraft. Below are suggestions to help you get out of your overdraft and into the green.
Money Plan
Be your own accountant, devise a budget, and treat your income and outgoings as if you were running a fortune 500 company. Lay out on a spreadsheet precisely what you earn after tax, including any benefits, entitlements and any side incomes you may have. Now write down your bills only. Gas, electric, utility, food, mortgage payments, everything you need to pay out to live and survive. These are your necessities.
Disciplined Spending
How are your finances looking now? If you have money left over from your income taking away these necessities, one cause of you living in your overdraft could be that you are merely overspending per month. Luckily this is easily resolved, it just takes a bit of discipline to reign in your spending.
You could try using this spending tip. Withdraw the money left for spending from the bank, divide this into envelopes for each week of the month. Label the envelopes, and only open one per week. You must budget the entirety of the envelopes allowance for the duration of the week. Whether this is for entertainment, clothes, gift giving and so on.
Make More Money
If by looking at your budget your necessities outweigh your amount of income, the above solution will not suffice. You may need to strip back your essentials. You could start by looking at your food bill, or even consider getting rid of your car and taking public transport. If your money is still looking tight, you could consider downsizing your house to a property with a lower mortgage.
If none of the above suggestions are viable, there is an alternative. You could earn more. You could update your resume and apply for a promotion, or apply online for better-paid jobs. You could also consider making an extra income outside of work. For instance, you might look at Uber driving, starting your own blog or start a drop shipping business online.
Debt Spiral
If you’re beyond the point of no return in your financial endeavors to salvage your money issues, the last resort you could try is chapter 7 bankruptcy, which an attorney will help you understand whether you qualify and your possibilities of this being successful. Sometimes our situation appears a distant dream from ever being salvaged which can cause mountains of stress and anxiety. Bankruptcy is an option to help you start again and potentially write off any previous debt.
With thousands of reading materials available online, there is a large scope of help available to help you organize and resolve your personal finances on your own accord without the need for a financial expert. Realizing you have a financial issue is the first step you’ve made to start putting things right, the second step you took was by reading this post, keep making more steps, and you’ll be on your way to financial freedom in no time.