Improving Your Financial Situation

Looking at your finances from where they sit today, your situation may feel more than a bit challenging. However, with proper planning and discipline, you can turn things around. The first step toward making your situation better is to fully accept that you have a serious debt problem that needs to be addressed. Once this is done, you can begin to clear a path toward eventual financial recovery.

Begin by taking a fair and balanced look at your current financial situation. Take stock of your monthly cash inflows and outflows, and determine what your true bottom line looks like on a monthly basis. If you’re running a deficit, you will have to make choices, both obvious and difficult, to better manage expenses.

The next step is to stop using your credit cards and credit lines any further. There’s simply no good reason to fall deeper into debt. Importantly, do not close any of your existing accounts, as doing so can lower your credit score. Simply refrain from using your accounts while still maintaining them and focus on paying down your debts with any extra money that you earn. Live by your cash and debit card alone while following the following hard and simple rule – If you don’t have the money to buy it, then live without it.

To enhance your earnings, pursue a second job with flexible evening and weekend hours. Restaurants, retailers and other service businesses are viable candidates for securing extra income. You can also consider leveraging any specific skills that you possess related to teaching, writing, editing, photography, web design, the arts, tax preparation, and salesmanship, for starters.

It will require discipline and sacrifice to improve your financial situation. It will be necessary for you to learn to live without some things to which you may have grown accustomed. Until you’re on firmer ground with your debt, gone are the days of attending expensive sporting events and concerts. Gone are the days of spending money on high-end clothing. Gone are the days of trying new restaurants. When you’re not working, you may have to spend more time than you’d otherwise prefer simply relaxing at home, reading or watching television for entertainment. However, look at it this way – It’s a matter of sacrificing in the present so that you can have plenty of time to enjoy more of life’s little extras in the future.

Permanently reducing your debts will require you to take consistent long-term action. Think of debt-reduction as a new habit, and not something that you merely do some of the time, or only when you feel like it. No. Rome wasn’t built in a day, and just as getting into better physical shape takes time and effort, so it will be with your debt-reduction process. Clear your mind of any questionable financial decisions that you may have made in the past and instead focus on your future. Understand from the outset that embracing a new and simpler lifestyle probably won’t prove easy or feel very good in the beginning. However, you will generate momentum, so remind yourself that making the full effort is in your long-term interest. Things will indeed get better. You’re not the first person to fall on hard times – and you most certainly won’t be the last – but this can be the last time that you journey down the debt-reduction road in your lifetime.