Living Without a Salary

How to reduce your expenses, so you can live without a salary!

Credit Card Debt-itis June 24, 2010

In medicine, many illnesses and diseases tend to have “itis” attached to the end of a word. Dermatitis–a condition affecting the skin…appendicitis–an inflamed appendix…debtitis–a condition that affects the mind in that the victim must spend too much money and get into debt. When attached to a common word like debt, it then indicates that there is a sickness present. And let me say that there is a sickness present with credit card debts! While many experts think that there are ways to cope with credit card debt-itis, the only way to get rid of this condition is to get rid of the credit cards. Only then can the victim really start the healing process. Get rid of the credit cards, and then follow the 3 step plan to curing yourself of credit card debt-itis.

Planning

The first part of planning is to make a list of the charges you incurred while afflicted with credit card debt-itis. At the very least, if you are in too deep because of your illness, just write down the name of the credit card and the amount you owe on that card.

Next, write down how much income you have each month. Include your salary and any other side income you get. On the other part of the paper, write down all your expenses for the month, excluding your debts from credit card debt-itis. Look at where you can fit in payments on your debt, and work these payments in. Then re-work your expenses to include your debt repayment plan.

Executing

This next step is the most painful to complete. Cures are never easy, but getting over credit card debt-itis and staying cured is very worth the pain. After the planning phase of your cure is complete, then you must actually write the checks and pay down these debts. Cures take action, and you must take action. If you stop paying down these debts, your debt-itis will come back even stronger. It is in your best interest to continue with the cure.

Evaluating

Completing the first two phases of your cure are the hardest part of the healing process. After you have made significant progress in paying down your debts, evaluate your accomplishments. Have you paid down many of your debts? Are the balances going down significantly every month? If they are, then consider the cure effective and finish up with your cure. If not, look at where else you can take money from to pay on your debts. Go back to the planning phase and start again. Credit card debt-itis will not go away on its own, and must be treated for you to get better.

Freedom At Last

You may not realize how much you are suffering from credit card debt-itis until you get free from its grasp. Tossing and turning every night, worried about your debts is a sure sign that you are suffering from credit card debt-itis, and when you are finally cured, you will find that sleep comes easily. Also, when you are free, you will also be able to breathe easier…so take the first steps today to cure yourself of the dreaded credit card debt-itis. It can only get better from here.

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Debt Repayment Plan June 10, 2010

Filed under: Getting out of debt — joetb @ 3:42 PM
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Paying back debts is a very popular subject these days. For instance, look at the many debt consolidation companies that exist today compared to 30 years ago. There was not a need for them like there is now. Considering the state of the economy for the past few years, is it any wonder debt repayment is a hot topic? However, there are several confusing messages when it comes to debts and debt repayment plans. If you are in a similar situation, how do you know what will work and what will not? If you use common sense, you may be able to figure it out on your own. In the meantime, here are some common sense ideas to speed your process along.

Where to Start

Often, when people are trying to get a grip on their finances, they get lost not knowing where to start. Like a song from a popular movie, “Start at the very beginning; a very good place to start…” Where is the beginning? Analyzing your situation, of course. This will involve getting real about how much you owe, to whom you owe it to, what your monthly bills come to, and what your total income looks like. When you have done that, you can then begin creating a plan.

The Next Step

Once you have analyzed your situation, it is time to create possible scenarios of what your debt repayment plan will look like. A possible scenario may be that you aggressively pay back your debts, while cutting back on other, non-essential, expenses. Another one might be to pay a little less on your debts while keeping some non-essential expenses in your budget. With each scenario, project out how long it will take you to pay off each debt. Doing this will help you to choose which scenario you want to go with.

Follow Through

Choosing a plan will not be that easy, but is a very essential step in the debt repayment process. After committing to a plan, you must follow through with it. Otherwise, a debt repayment plan will remain a plan on paper only, and you will not reap the benefits of it. On your very next paycheck, make the necessary payments according to your plan. Theoretically, this should get you out of debt pretty easily. However, life does not always work that way.

Evaluate and Adjust

After about 6 months, look at your plan and the actions you took. Did you make any headway on clearing your debts? More importantly, was the plan workable? Were you able to make the payments on time, and still lived comfortably? If you answered negatively, then you need to readjust your plan so that you can handle all expenses comfortably. Of course, if your plan is working well, there is no need to adjust it. A plan that allows you to pay off your debts within two years and still live comfortably is a plan that will work in the long term. Just as with weight loss, any eating plan that allows you to indulge once in a great while, while still losing weight is one that will work in the long term.