If you are just starting spending money and want to set up yourself for the best solution, to stay as much as possible debt free, or you are already trying to come down from your already existing debts, the best rule to handle that most wisely is “to not spend more money, than you personally have available”. The biggest problem you can cause for yourself, is to pretent being “blind” and say, that you have 20.000 $ cash at hand, because you got that much limit on the new Credit Card, you just received. Another point, what doesn’t count as “available” money, is the lend amount, you still have to get back from a good friend. Or your new plan, to sell your house.
The overall bad situation on finances of all these people on the planet, is coming from spending money, what is not yet gotten in their own pockets.
Number-One-Rule
What you don’t have, you cannot spend. Logical, isn’t ?
But … there ARE reasons, where having for example a Credit Card, becomes a big help, because you have to pay for something, you don’t have the money for yet. But it seems extremely important for your immediate and future survival. Please use this card, only for that one thing, so you know exactly, that you can pay it back, easily. And it has to be for something, what changes your life (for sure) to the better.Having a Credit Card can really help you, to get something you urgently need, without friends or family start arguing about “money”.
A Hint For Your Daily Shopping
For a certain amount of time, long enough for a real evaluation, I observed customers, shopping in a “WAL-Mart Super Center”. I found just 2 types of shoppers:
1. The person, who fills the shopping card up to the top and you think, who is gonna eating all of that.And it’s not, what you normally call good nutrition ! It is “food” for watching TV, or coming home and get a little snag in between from the fridge … something like that. They can choose the type of chips they want, the dip, and the type of drink, which should then go with that. I’m calling this the “ruthless shopper”. The present-time enjoyment is more important, than the thought about the money.
2. The person, who comes with his shopping card, and on the “picks” he/she made so far you can see, that this person knows exactly, what is missing in the household, and then this is the person, who is asking for the cheaper products - same quality off course - and “making a face”, if you don’t have it. In the first moment you think these are the Poor (maybe they are !), but then you actually feel lots of respect, because you know, that - whatever their financial situation is - they still do fine. They got somehow that money, they know what it is worth for them, and then they figure out the optimal use for it. They know, that this is all they have, and what they exactly need to buy !
You can see, here are some differences in attitudes.
How can you come down from huge debts ?
First of all, don’t make them too huge, because you cannot come down anymore. There comes the moment, where you have to realize, that “figuring it all out”, doesn’t help anymore. This will be for you the “moment of the truth” .
That’s all, what I can say to it.
But there is a last solution, what is perfect for a handling, but not for your Credit Records. And this is called “Debt Relief”. This means, when you went already on for too long time, suffering yourself through your overcharged Credit Cards, then the government (that’s what I understand - I hope I say this correctly), will help you by law, to bring you freedom.
There are debt-relief companies, they help people in despair, and they talk to the creditors, get a good deal, and the overall amount of debts can go down until the half of it. Because the government or a certain law, will pay/handle the difference. But however it works, the debts will go down dramatically. And so a person can much better deal with it, to more comfortably and relaxed pay it all back.
You just have to think about it, that your entire credit-ability is completely gone, you will have the most worse credit record “in history”. Though somewhere later, you may get it all back easily. But - if you are a business man, or you want to start one, or you need a good finance record somewhere soon again, or you want somehow in the future continue with a normal shopping situation, or getting some new credit for a car etc, then it might be wrong to do that. It is also possible, that, if you are looking for a better employment, that it gets found out as well. Companies watch for such points. If you could make some extra hours on your job, to help to pay it all off yourself, could be another good solution.
Please work it all out, before you jump into it. But it still is extremely helpful, if you know exactly, what you are doing.
Technorati Tags: debt free, sell your house, shopping