When we find ourselves in financial trouble, our first instinct is often to run and hide--because, let's face it: debt, and debt crises, are not pleasant things to have to tackle. But the longer we try to outrun credit trouble, the worse our predicament becomes.
Of course, assessing the damage that past financial mistakes or unexpected financial burdens have caused doesn't require a fancy online service, or a credit doctor, or "As Seen On TV" promotions. The first step to getting back on the path to financial stability is much simpler: make a list. Grab your nearest notepad and Bic pen, and get to work logging your typical monthly expenses and incoming money.
Then--and this is the part we often forget--take a deep breath. And get ready to prioritize your debt crisis.
One of the most important steps you can take after making your list of outstanding debt, is to prioritize that debt. Know which debt is costing you the most--whether it's the credit cards, the student loans, or the car payment--and make sure you're working every month toward reducing debt. Occasionally, prioritizing debt will mean that instead of paying more than your minimum credit card balance, you'll have to pay only the minimum so that you can be faithful to your other financial obligations.
Other helpful steps to take is to contact your outstanding lenders and see if you qualify for smaller interest rates; ask them how they recommend you bring down the amount you owe them, or see if they'll wave your annual credit card fee (if applicable). Sometimes, you'll find that your good financial behavior has paid off simply by being bold enough to ask.
Consider Additional Income Generators
But sometimes making a list, checking it twice, asking smart questions, and being bold, don't always cut it when it comes time to pay your bills. If monthly income isn't flowing as strong as it should, consider your employment situation--are there opportunities for more work hours, and have you made yourself available to cover additional shifts? Is there wiggle room in your schedule to pick up some freelance work, or an opportunity to turn a hobby or your crafting into a source of revenue?
Assessing your personal talents and how you budget your free time can open new doors to additional income that will help catapult you into financial well-being.
If you found this post helpful, or have your own tips to share, please sound off in the comments section!