To get out of debt, one has to go through a very challenging yet simple process. It involves looking inward and doing an assessment of self and everything that one does – one’s habits, attitudes, priorities, and character. To many, this process can sometimes be very uncomfortable and painful. However, taking this ‘journey’ is also crucial, most especially if the person really wants to put his life, starting with his finances, in order.
In order to make the process effective, a person has to give sufficient time to sit down and write everything. This process allows for reflection and hopefully, realizations.
If you are willing to go through this process, begin by evaluating the following:
Income. Put in writing how much your income is per month. If you and your wife are both working, combine both your income to come up with the monthly family income. Other items that may be part of income would be government assistance you receive as well as grants.
Expenses. All expenses should be written down. Be sure to include mortgage, insurances, and loans. Don’t forget to include all your variable expenses such as
clothing, entertainment, and gifts.
When identifying your income and the expenses, be sure to write them in monetary values. When you’re done, make a comparison between in income and the expenses. Subtract the expenses from the income. Ideally, the result should be positive, which means there is an excess. If we were looking into a business, the excess would signify profit.
The problem however, is that most of the time, the result we get is negative. This means that, for most of the time, we’re spending more than what we’re earning. This is not good. When you find yourself in this situation, the next best thing to do is to seriously rethink your monthly spending. Cut out any unnecessary expenses. The new goal should be to ensure that you have money left at the end of each month.
A question remains though: how can you get out of debt? If you rely on the little savings you make at the end of each month, it’s going to take a long time before you can get out of debt.
One way out of debt is to declare bankruptcy. When you declare bankruptcy, you declare your inability to pay your creditors. There are opposing views on this on its effect on credit standing. Some would say that declaring bankruptcy will “bring peace of mind; it will cancel your debt; that the debt collectors’ calls will stop; and you’ll be able to start and sleep well again”.
To some, declaring bankruptcy may be the only way out. However, the advantage for doing such is short-lived. Somehow, in the future, time will come when you will need to avail of loans. That will be the time you will find out the effects of filling bankruptcy.
This is a fact: if you declare bankruptcy, it will have a significant effect on your credit rating. Bankruptcy should be your last resort because of its serious consequences. For one, once you declare bankruptcy, it will be very difficult for you to get loans or credit cards in the future.
Another way to get out of debt is to get a Debt Consolidation Loan. What it does is it will take several different debts that you owe to different creditors and consolidate them into one easy-to-pay debt. In general, the monthly payments for these loans are lower than your original debts.
Whichever option you choose, just be sure that you are looking at the bigger picture, with your future in mind.
Siena Lombardi is an experienced journalist/writer/blogger for eDrugstore.MD, a leading online drugstore where clients can buy FDA-approved medications such as acyclovir online. You can buy acyclovir inconspicuously from your home or office and have the package shipped overnight.
I'm Louida from Atlanta, Georgia and I'm a mother of two daughters, blogger, and full time working mom at a Business Consulting Firm.
I love helping others learn how to start working from home on the internet free to supplement their current income.
I also blog at Productreviewmom.com
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