Like a lot of other households in...well...the world. We accumulated debt. I suppose I classify debt as anything you get that you have to make payments on. Credit cards, student loans, mortgages, car financing,it can be overwhelming. I know all about that....next thing you know, you're stuck and it feels like you're drowning and there's no saving your credit.
On the plus side, there's ways to get out of debt without declaring bankruptcy. With a little hard work and patience, everyone can get out of debt. No more sleepless nights, no more stress induced eating/crying!!
Plan. A little planning goes a long long way.
Are you so stuck in debt that you can barely afford to make your monthly rent or mortgage payment every month? If the answer is yes, maybe you should consider downsizing.
"That seems silly though, an average family of 4 in a little tiny apartment? That would never work."
Yes...I can see how that would be crazy...but consider this, there's a family of 4 appropriately called the "Tiny House Family" who built their 320sq. ft. house for only 1,200$. No mortgage. No rent. You can build tiny homes for LESS than that.
Maybe tiny homes aren't your thing (if you're the type of people that don't like adorable sized homes...you monster.), so why not consider living with a family member? Or have a family member temporarily reside with you? It'll help out with costs as you'll have a tenant (just remember to follow all of the laws and guidelines....), and they'll have a place to live. Win Win for everyone.
Whatever the case may be, make a plan.
Create. Create a successful budget.
Have you ever tried budgeting and failed so hard that it was basically a traumatizing experience that made you cry and rock back and forth in the fetal position in a corner?
Probably not, but chances are you've probably failed at a budget at least once.
In order to create a successfull budget, you need to be honest and real about it. Don't change your spending habits for 3 months. Use a weekly spending tracker (you find only find a billion on the internet.), and write down everything you've spent that week. Do that for a month. Then two months. Then three months WITHOUT changing your spending habits. At the end of each month go back and look at what you've spent, what you've saved, what you've borrowed or loaned out, how much money you spent on bills, EVERYTHING.
Don't forget to track your savings!!!
Cut. Cut your spending.
At the end of 3 months, change your spending habits. Ask yourself "do I really need to buy X thing every month?" Maybe it's something as simple as not getting manicures every month, or maybe you could stop going to the salon every month. If you can't afford it, don't do it.
The first 6 months of cutting is ALWAYS the hardest, they're the months that are going to really try your patience, but after the 6 months is up, it'll become natural and you'll look back and wonder how you could be so silly.
Cut your spending by 1% each month. First month, cut 1% of your spending, put that money into a saivngs account (that you cannot get into. If you need to tell the bank to lock that account so you cannot withdraw any money from it, then do that.). Second month, 2% into savings. Third month, 3% into savings, etc. At the end of the 6 months, you'll have a nice savings built up to start paying off your debt.
Where to cut spending:
Anything can be negotiated including your debt (settling.)...try negotiating your phone/internet/cable package down...even if it's down 20$, it's better than absolutely nothing.
You don't NEED name brand food. The generic brand is just as good (if the box bother's you, just use the bag and throw out the box!).
Plant your food. Make a food garden...veggies and fruit can get expensive. Rather than buy all of your fruit and veggies, grow them! If you don't have the space to grow them, think about setting up an Aquap-grow system for your veggies....use fish that you can eat (uh...NOT goldfish, but catfish or trout, even salmon.). You'll not only be able to harvest veggies, but you'll be able to harvest fish too.
Traveling. If you can carpool, or grab a ride with a co-worker that lives nearby....or even walk to work, do it! You'll save money on gas, your car won't rake in a bunch of unneccessary km (better for resale!!), the environment will thank you, and your body will thank you for the exercise (yeah...I know, we're in Canada and the winter's are freeeeezing....but your body WILL thank you I promise.). Invest in a bicycle! Be a green traveler (but not the jerky kind who like to rub it in everyone's faces...don't be that guy.).
Increase your income starting the in the first month.
Now you're really wondering "how in the world am I going to do that."
Have a yard sale, bake sale, car wash, whatever. Maybe you're great at knitting and crocheting. Maybe you're great at making doll's clothes. Maybe you're amazing at drawing and painting. Or maybe photography is really your thing. In any case, find a way to turn your hobby into cash.
How? Open up an online store to sell your handcrafted items online. There's lots of places where you can sell that photo of a leaf you took 6 months ago online to be used as a stock photo. There's a market for everything!!
If you're incredibly at making doll's clothes, there are actual people out there who will buy a life sized doll outfit.
If you're incredible at making baby clothes, there's actual people out there who will buy adult-baby clothes for £55.00....which is 100.34 Canadian dollars, you buy 40$ worth of material, and that's still a 60$ profit. That's a nice chunk of change.
Put all of the money that you've made by increasing your income into a savings account for debt repayment.
Now what? At the end of your 6 month period...look into your savings....You probably have a nice chunk of change from all of your hard work...use that money to start paying off your debt.
Start with the big bills. I'm not saying pay off your entire mortgage with the money you saved....I'm saying, if you owe 1000$ on a credit card bill that's now in collections, go out and get yourself a prepaid card, put the money on the prepaid card, and then pay the bill over the phone so it's out of your hair. You can even try negotiating with them..."I'll give you 600$ for that right here right now, if you're willing to settle with it." if they say no, ask to speak to a supervisor and chances are they'll do it to get the company's money...ANYTHING can be negotiated.
For the smaller bills, call up where they're with, and negotiate a price and a payment plan. "I know I owe 200$ for the cell phone that I refused to pay....but I'm willing to give you 100$ next month on X date if you're willing to settle with me."
Perfect. Done.
Not really....You might not be able to pay off ALL of your debt in 6 months time....but if you keep saving, budgeting, tracking, negotiating, etc. you should be able to pay off a bill or two at the end of the 6 months, and you'll have the tools and know-how to keep going.
On the plus side, there's ways to get out of debt without declaring bankruptcy. With a little hard work and patience, everyone can get out of debt. No more sleepless nights, no more stress induced eating/crying!!
Plan. A little planning goes a long long way.
Are you so stuck in debt that you can barely afford to make your monthly rent or mortgage payment every month? If the answer is yes, maybe you should consider downsizing.
"That seems silly though, an average family of 4 in a little tiny apartment? That would never work."
Yes...I can see how that would be crazy...but consider this, there's a family of 4 appropriately called the "Tiny House Family" who built their 320sq. ft. house for only 1,200$. No mortgage. No rent. You can build tiny homes for LESS than that.
Maybe tiny homes aren't your thing (if you're the type of people that don't like adorable sized homes...you monster.), so why not consider living with a family member? Or have a family member temporarily reside with you? It'll help out with costs as you'll have a tenant (just remember to follow all of the laws and guidelines....), and they'll have a place to live. Win Win for everyone.
Whatever the case may be, make a plan.
Create. Create a successful budget.
Have you ever tried budgeting and failed so hard that it was basically a traumatizing experience that made you cry and rock back and forth in the fetal position in a corner?
Probably not, but chances are you've probably failed at a budget at least once.
In order to create a successfull budget, you need to be honest and real about it. Don't change your spending habits for 3 months. Use a weekly spending tracker (you find only find a billion on the internet.), and write down everything you've spent that week. Do that for a month. Then two months. Then three months WITHOUT changing your spending habits. At the end of each month go back and look at what you've spent, what you've saved, what you've borrowed or loaned out, how much money you spent on bills, EVERYTHING.
Don't forget to track your savings!!!
Cut. Cut your spending.
At the end of 3 months, change your spending habits. Ask yourself "do I really need to buy X thing every month?" Maybe it's something as simple as not getting manicures every month, or maybe you could stop going to the salon every month. If you can't afford it, don't do it.
The first 6 months of cutting is ALWAYS the hardest, they're the months that are going to really try your patience, but after the 6 months is up, it'll become natural and you'll look back and wonder how you could be so silly.
Cut your spending by 1% each month. First month, cut 1% of your spending, put that money into a saivngs account (that you cannot get into. If you need to tell the bank to lock that account so you cannot withdraw any money from it, then do that.). Second month, 2% into savings. Third month, 3% into savings, etc. At the end of the 6 months, you'll have a nice savings built up to start paying off your debt.
Where to cut spending:
Anything can be negotiated including your debt (settling.)...try negotiating your phone/internet/cable package down...even if it's down 20$, it's better than absolutely nothing.
You don't NEED name brand food. The generic brand is just as good (if the box bother's you, just use the bag and throw out the box!).
Plant your food. Make a food garden...veggies and fruit can get expensive. Rather than buy all of your fruit and veggies, grow them! If you don't have the space to grow them, think about setting up an Aquap-grow system for your veggies....use fish that you can eat (uh...NOT goldfish, but catfish or trout, even salmon.). You'll not only be able to harvest veggies, but you'll be able to harvest fish too.
Traveling. If you can carpool, or grab a ride with a co-worker that lives nearby....or even walk to work, do it! You'll save money on gas, your car won't rake in a bunch of unneccessary km (better for resale!!), the environment will thank you, and your body will thank you for the exercise (yeah...I know, we're in Canada and the winter's are freeeeezing....but your body WILL thank you I promise.). Invest in a bicycle! Be a green traveler (but not the jerky kind who like to rub it in everyone's faces...don't be that guy.).
Increase your income starting the in the first month.
Now you're really wondering "how in the world am I going to do that."
Have a yard sale, bake sale, car wash, whatever. Maybe you're great at knitting and crocheting. Maybe you're great at making doll's clothes. Maybe you're amazing at drawing and painting. Or maybe photography is really your thing. In any case, find a way to turn your hobby into cash.
How? Open up an online store to sell your handcrafted items online. There's lots of places where you can sell that photo of a leaf you took 6 months ago online to be used as a stock photo. There's a market for everything!!
If you're incredibly at making doll's clothes, there are actual people out there who will buy a life sized doll outfit.
If you're incredible at making baby clothes, there's actual people out there who will buy adult-baby clothes for £55.00....which is 100.34 Canadian dollars, you buy 40$ worth of material, and that's still a 60$ profit. That's a nice chunk of change.
Put all of the money that you've made by increasing your income into a savings account for debt repayment.
Now what? At the end of your 6 month period...look into your savings....You probably have a nice chunk of change from all of your hard work...use that money to start paying off your debt.
Start with the big bills. I'm not saying pay off your entire mortgage with the money you saved....I'm saying, if you owe 1000$ on a credit card bill that's now in collections, go out and get yourself a prepaid card, put the money on the prepaid card, and then pay the bill over the phone so it's out of your hair. You can even try negotiating with them..."I'll give you 600$ for that right here right now, if you're willing to settle with it." if they say no, ask to speak to a supervisor and chances are they'll do it to get the company's money...ANYTHING can be negotiated.
For the smaller bills, call up where they're with, and negotiate a price and a payment plan. "I know I owe 200$ for the cell phone that I refused to pay....but I'm willing to give you 100$ next month on X date if you're willing to settle with me."
Perfect. Done.
Not really....You might not be able to pay off ALL of your debt in 6 months time....but if you keep saving, budgeting, tracking, negotiating, etc. you should be able to pay off a bill or two at the end of the 6 months, and you'll have the tools and know-how to keep going.
No comments:
Post a Comment