People often ask for tips on managing debt. We could write volumes on how to properly manage debt, but there is really one principal behind all of it – spend less than you make. It may sound simple, but in practice it can be difficult. But with a few simple steps, you can take the mystery out of this principal, and get yourself on strong financial footing. There are three basic tips that we immediately offer to anyone interested managing debt. They are: (1) know your budget, (2) make a plan, and (3) pay less.
The first step is to know your budget. Many people do not have a good understanding of how much they spend in a month. So, it is really important to create a written budget which lists out how much you spend. You can start today, just writing down every penny that you spend. Make sure to add those things which you only buy every couple of months, or maybe once a year –things like holiday gifts, property taxes, new tires for your car, etc. After a couple of months you will have a good understanding of your monthly budget. This is essential to make sure that you don’t spend more that you make.
Our second tip is to shop around. One of our attorneys used to describe a situation in which his father used to embarrass him at McDonalds by asking for a discount every time he went to the counter. Sometimes they would say no, but many times the clerk would pull out a coupon, or enter a discretionary code which would get his dad 10% off of cost of the meal. We have found that you can do this almost anywhere. So always try to get the best deal you can. Shop around between stores for the best prices. Clip coupons whenever you can. Ask for discounts from the store clerk – even if you have no reason to think they will give you one. You may be surprised at what happens. Imagine if you could save an average of just 10% on everything you buy, just think about how much better off you would be financially.
Finally, pay your debt down faster. The credit card companies make money by keeping you in debt. The faster you can pay it off, the better off you will be. Try to pay more than the minimum payment on at least one of your credit cards every month. In no time you will have that card paid off, and you will be free of its burden – then move on to the next card and do the same thing. With a plan and a little bit of discipline you can learn to effectively manage your debt. Good luck.
DISCLAIMER: This website is designed to provide general information only. Nothing contained herein constitutes legal advice, nor is it intended to offer legal advice. Neither Fidelity Law, nor any participants in the production of this material make any guarantee as to the accuracy or currency of any information contained in or created through use of any link to another website contained herein. Use of this material is not intended in any way to create or even to convey the impression that such use of this material by any person, organization or entity of any nature and/or kind constitutes any attorney-client relationship whatsoever. You should consult a lawyer for individual advice regarding your own situation.
Can I Cancel a Residential Mortgage in a Bankruptcy?
In general, a secured loan can not be cancelled, or discharged, in bankruptcy without also agreeing to surrender the property. So in general, the only way to cancel a residential
Can I Reduce the Amount of My Car Loan in a Bankruptcy?
Most of our clients are aware that they can not discharge secured loans in a Chapter 7 bankruptcy, unless they surrender the property. But what most do not know is
Does My Bankruptcy Affect My Inheritance?
Some of our clients are surprised to find out that their bankruptcy proceedings can affect their inheritances, even if the inheritance comes after the discharge of the bankruptcy. That’s right,
- Can I Cancel a Residential Mortgage in a Bankruptcy?