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Unfortunately, financial ruin is a common plague for many in a weak economy. Fortunately, often it is preventable with a good plan. Evaluate your finances and do what it takes to get back on course.
Signs of Financial Ruin
1. You rely heavily on credit cards.
2. You are behind on payments.
3. You have very little or no emergency fund.
4. You frequently overdraw your checking account.
5. You don’t know how much your credit card debt is.
6. You borrow from savings or retirement accounts to pay for monthly expenses.
7. Your credit score is below 600.
8. You often reach your credit card limits.
9. You get collection calls and notices.
10. You never make a budget.
Getting Back on Course
1. Start with a budget: Budgeting is hard, but worth it. Those who make and consult a budget regularly are conscious of their spending. They are more likely to buy only what they need and fight impulse spending as they work their way out of debt.
2. Cut up credit cards: If you rely on your credit cards rather than your checking account to make ends meet, cut it out of your life—literally. Keep one credit card for emergencies, but don’t keep it in your wallet so you aren’t tempted to spend it when you’re out. Cut up the others until your debt is repaid and you are back on your feet.
3. Cut unnecessary expenses: Many people pay for things they don’t really need. For example, gym and magazine subscriptions, or cable TV. Removing any unnecessary expenses can make a major difference in your financial stability. Once you’re far from the danger zone and are sticking to a healthy budget, you can consider putting some of those things back into your life.
4. Focus on building your savings and emergency funds: As you work to cut your expenses, take any extra money you have and put it into a savings or emergency fund. That way, when a real emergency hits or you find you don’t have enough money to cover a bill, you can draw from those accounts rather than your credit card.
5. Consult with an experienced debt professional: Sometimes, the only way to get back on your feet is to consult with a professional who can give you knowledge and tools to aid your financial recovery process. If any of the above-mentioned signs apply to you, call our office today and we can help you get your life back.
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