Avoiding Debt
Date: Fri, 11/06/2009 - 10:18
When my wife and I got married, she had some credit card debt. We worked really hard the first four years of our marriage to pay off that debt and we did.
Recenlty, We had to relocate because of work (really, the lack there of) and we had to rely on some credit cards to get by while we looked for employment. This is the first time in my life that I saw how easy it is to build up credit card debt - and that I really don't know to much about avoiding debt, or getting out of debt. When we were paying off my wife's debt we were in a great financial situation - I was in school and I had scholarships and a stipend that allowed us to take care of our basic needs, so any 'extra' income (ie paychecks) went to help pay off her debt.
So here in my cluelessness I ask - what are ways avoid debt or get out debt?
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First and foremost, stop using your credit cards ASAP! Find way
First and foremost, stop using your credit cards ASAP! Find ways to maximize what little income you may have. Get rid of the satellite dish, turn-off your home phone line (use your cells instead), increase your insurance deductibles (will lower your premiums), brown bag your lunches, raise/lower your home thermostat to marginally comfortable levels, etc. etc.
Above all, spend a great deal of time knowing where every penny goes, especially your cash spending. This will help you see where money is leaking out. Do you have access to MS Excel? If so, build a "spending spreadsheet", not a budget. When you understand your spending, then build a budget AND STICK TO IT. Write everything down and put it into your spreadsheet. Categorize the spreadsheet into similar areas (automotive, groceries, mortgage/rent, utilities, medical, etc.) and focus on areas with flucuating amounts then try to understand why they are unstable.
Getting into debt happens because of your spending. Getting out of debt is no different. If you can understand your spending (as it relates to your income), you can help you understand your "get out of debt" options...
Best of luck!
