There are many things you can do to become debt free. Which is "best" will depend on your circumstances. Other than car payments, it does not appear that you are carrying a bunch of credit card debt - good.
1st) Start with looking at the choices you are making regarding spending the money you are bringing in.
2nd) You have income, you have expenses, what you spend money on is a choice. There are 3 kinds of expenses.. Fixed (have to pay, fixed amt), Variable (have to pay, variable amt) and Discretionary (stuff you want but don't have to have). Anything discretionary is a life style choice.
3rd) If you don't know what you are spending money on, start keeping track. Yes, it's a pain to do but do the exercise if you want to get off this endless treadmill. Carry something to record every time you use a debit or credit card or paper money.
4th) Understand that putting something in savings is not a discretionary item, it's variable. Saving is what you do as part of your expenses, not what you do after everything else is paid. Have you heard the phrase "Pay yourself first". That's what it means. I recommend $50 per household member per month.
5th) Put away 3 - 6 months of expense $ as part of the 4th rule. Do this in a separate fund. This is your emergency fund - it doesn't get hit unless IT'S AN EMERGENCY. That lattee isn't an emergency!
6th) Write down your financial goals. How are you going to get there if you don't know where "there" is?
7th) And probably the most important, you and your spouse need to get on the same page. If you are both working for a common goal, you have a good shot at getting there. If you don't have this discussion, the money troubles are more likely to take you to marriage counseling or divorce court. This is the #1 reason couples break up.
Good luck.
2007-02-12 14:47:12
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answer #1
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answered by CJ 2
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My wife and I (38 and 34) did live paycheck to paycheck until we started budgeting every month. When we saw what we are actually spending and blowing on frivalous items because we thought we deserved it, we changed our tunes. Now, we have a nice little savings and toys are not as important as we thought they were. Brand names mean very little any more unless it is on sale. A few months ago, I lost my job and I didn't have a nervous break-down over it because we were prepared. The biggest changes we made was getting rid of all credit cards, and writing down and agreeing on a monthly budget before the month begins. I wish everyone could understand this. I live in an adequate house, and we drive cars that are 3 years old and paid for and I will always remember those days of worrying whether or not a check that I haven't written will bounce before I can get the money in the bank. I hear my co-workers complaining all of the time and they live in houses they can't afford in trendy neighborhoods and drive cars that are always a step away from repo.
I guess that this is my plea to everyone to please start living on what you make. Our grandparent's common sense ways are still valid and timeless. Don't fall for the immediate pleasure you get from buying items on credit. You will enjoy your toys and much more if you save and pay for them.
Thanks for indulging me.
2007-02-13 02:56:35
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answer #2
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answered by Saved! 2
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Read "No Debt, No Sweat" by Steve Diggs. I was like you and had tons of bills. I'm single and don't have kids, but I owed $30,000 in student loans and another $30,000 in credit cards. In the book, it teaches you about God yes, but also how to manage your money way better. If you don't wanna read this book, here's my advice. Get rid of some of the things you really really want, but don't need. If you want I can guide you through it! I'm got out of debt in like 2 1/2 years. That's not a long time when you're $60,000 in debt! So if you want, send me an email or im me on yahoo: iluvcreed4ever is my screenname! Hope this helps!
2007-02-12 14:00:19
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answer #3
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answered by melissabgarner 2
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Dave Ramsey says to keep away from those. There rip-offs. He has a internet site and a few books out. His plan to get out of debt, promote what you'll be able to, rice and beans, and begin paying difficult down at the money owed.
2016-09-05 08:14:49
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answer #4
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answered by golden 4
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I personally look after my family budget and all spending items need to be accounted for so that at any point in time you know where you are. Requires discipline but that's the only way.
To help you with budgeting I'd recommend a personal finance software by Australian business Parcus Group.
Easy to use program with features including budgeting, financial planning, real estate analysis, shares valuation, life insurance...
Costs US$24 so it's not a huge investment but a good value for money.
You can get it on
http://www.parcusgroup.com/index.html
Regards
2007-02-13 13:48:52
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answer #5
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answered by Finance_Expert 2
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First off cancel the gym membership (walk, run, pushup, situp - its good enough for the military it can keep you in shape) and cancel the sat radio (XM/Sirius is a luxury not a necessity)
Next sit down and write out a bidget, list all your expenses from most important to least and start allocating your income. Make every dollar (or penny) work for you....tell it where to go.
List your debts from smallest to largest and pay the min on each...not with every cent you have left over in your budget pay toward the smallest one...snow ball that after its paid off and ATTACK the next one. Start paying cash for everything, have a set budget for groceries, gas, hygiene, etc. Set up cash envelopes for each part of your budget (one for groceries, one for gas, one for car maint., one for clothes)
Look at selling one or both of the cars for less expensive cars, scrape up and pay cash.
Its not a glorious road....but it is worth it. Check out DaveRamsey.com and his book Total Money Makeover. It details the plan that works....
2007-02-12 14:23:52
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answer #6
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answered by Anonymous
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Dont use credit cards. Start writing down if it is a want or a need. Shop with coupons. If your wife is not degree seeking in a lucrative carreer, raise the kids until they get into school, then she can go to college. She can apply for scholarships.
2007-02-12 15:25:12
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answer #7
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answered by happydawg 6
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Consolidating debt is an ideal way to reduce your amount and tenure of debt. You make a single payment to one lender on a certain date and this will help you clear off the debts faster. But the fact remains that debt
2007-02-14 18:29:15
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answer #8
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answered by mey t 2
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I simply can't believe he listed sat radio as if he 'needed' it.
Cut your expenses or get a raise. Those are your only options if you want to remain an employee.
Otherwise I you should go into business for yourself, that's the only way to build wealth quickly (relatively, compared to investing)
2007-02-12 15:27:59
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answer #9
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answered by kb 2
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Go to daveramsey.com easy steps to get out of debt.
2007-02-12 14:14:14
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answer #10
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answered by Anonymous
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