Dealing with debt can be extremely stressful. It can feel like you've lost control of your life. Often after making the minimum payments on your debts each month you will have almost no money to spare. An unexpected cost can shatter the delicate financial balance you work to maintain.
It is important to take control of your finances. With but a few changes to your financial habits you may to able to turn around your finances. First you should take stock of your monthly financial situation. Create a list of your essential monthly expenses such as rent, internet, food, and phone service. Subtract this amount from your net pay each month. The amount remaining is your disposable income. This is your fun money, though it may be smarter for you to use this money to pay off your debts more quickly or to save the money. This simple act of laying out how much money you must spend each month on your commitments such as bills and debt payments makes a huge difference in your ability to stay on top of your finances. One way to help with high debt payments is to reduce your expenses. There may be some areas of your spending which can be reduced. Perhaps you do not need cable TV after all or you could cook at home more instead of eating out so often. If cable television costs over $60 a month, then a year of cable TV adds up to over $700 total, which is quite a lot. While reducing expenses may seem harsh to some people, if it will allow you to pay off your debts more quickly than in the end it will be worthwhile. Remember, the faster you pay off your debts the less you pay in interest, which means the less you pay overall. You should keep track of how much money you have in your bank at all times. The easiest way to do this is with online banking. Today, all banks should offer online banking. If you don't have access to the internet it is always possible to visit your bank or to call to check your balance. By knowing your balance you can help to keep your spending within limits that you can maintain. Now, if after doing all of the above you still cannot afford to pay your debts and to live decently, then you may need to seek professional help. A lawyer may be able to negotiate your payments down reducing the overall balance on your debts. Or, it may be necessary for you to declare bankruptcy. There are many options available to help you manage your debt. Don't be scared by the word bankruptcy. Though it may damage your credit score remember, if all of your debts are legally wiped out, you never have to pay them. So, though you might feel embarrassed about declaring bankruptcy it might be the best thing for you.
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