The economy is on the rise, but that doesn’t mean thousands of U.S. consumers are not still in debt. Debts can become overwhelming, forcing a consumer to live paycheck to paycheck. As part of your New Year’s Resolutions you may have thought about becoming debt-free. But, getting rid of your debts isn’t always easy. It requires you to manage your funds better and it may, in some cases, require a fresh start.
Start Tracking Your Spending
You cannot get out of debt until you know where your money is going. That means tracking your income and analyzing your spending. Find out where every penny goes, review your spending patterns and see if there are any spending areas you can cut. You may be surprised at how much you’re overspending on dining out, groceries or even miscellaneous expenses.
Stop Using Credit Cards
Credit cards may seem convenient, but you pay for that convenience over time—and years longer and for more than you anticipated. Start using cash only for your purchases and limit how often you use credit cards.
Establish a Spending Plan
Once you know where your money goes, you need to establish a spending plan. That means setting a budget for each spending category such as gas, groceries, mortgage payments, debts, etc.
Remember to Pay Yourself First
Even if you are in severe debt, you need to save. A hearty savings account could help during emergencies, times of extreme cash shortages or worse, if you lose your job. Try to save at least 10 percent of your monthly take-home pay. Not only will this give you a small cushion, but could even help you later in life when it comes time to retire.
Stop Impulse Buying
The use of your discretionary funds can get you in trouble. Avoid impulse purchases as much as possible. Instead of just buying something because you have the funds, stop and ask yourself if you can find it elsewhere for cheaper or if you really need that item at all.
Don’t Create Anymore Unnecessary Debts
The fastest way to get out of debt is to stop digging into the debt pit. If you already have excessive credit card bills, creditors calling to collect or worse, judgments and liens, it’s time to stop creating more debt. That means no more using your credit cards, applying for new loans or just paying minimums.
Bankruptcy gives you a fresh start. Sometimes all you can afford is a minimum payment even though you’re trying desperately to get ahead. Bankruptcy allows you to either consolidate or wipe out most of your debt obligations, so that you can start a new in 2015.
If you’re facing serious debt or you’re living paycheck to paycheck, it may be time to consider bankruptcy for the New Year. West Palm Beach Bankruptcy Attorney at The Law Office of Kelley & Fulton can help you with your bankruptcy needs and even suggest other ways to get on track with your finances. Call us today for a no obligation consultation at 561-491-1200.