We are at the door of the new year and the question is: Is there still time to do something not to start the year in red? This is a very sensitive question because it involves some important points, and these should be carefully considered. Before finding the definitive answer let’s ask other questions to your financial life.
By answering these questions you will know whether or not it is possible to get out of the red before the year starts:
How big is my debt?
It is important to know precisely the total amount of your debt. There are cases of people who are totally in debt and don’t even know how much and to whom they owe. Without this information it will be difficult to get rid of this problem.
What to do? Paper and pen in hand … and get to work! Write down the exact amount of each of your debts, consider interest and charges, be sure to also write down who or what bank you owe.
Is there a possibility to renegotiate? Now that you know how much and to whom you owe, understand that there is a solution for everything. Regardless of the size of your debt if you are willing to exterminate it, even if it takes a while, you can!
What to do? Develop your action plan, analyze each debt and set deadlines. Think about whether there are other alternatives , such as a personal loan to pay off all at once. Measure interest and terms. Evaluate your possibilities, do not despair and act within what is possible.
What expenses can I give up?
It is the most “insignificant” spending that generates the biggest disasters. We may call them termite spending, they are small, seemingly harmless, but they do a great deal of damage and endanger the structures of your finances.
What to do? See if there are unnecessary expenses in your daily life. Make a list of all spending for the past two weeks, mark every penny, then underline all superfluous. You will be surprised! Without absolute control it will be difficult to achieve good results.
What generated this problem?
The biggest debts are usually for a sum of factors, it’s the good old snowball. It goes something like this: you have no money saved, then an emergency occurs, you end up spending what you do not have (credit card, overdraft), realize that the basic expenses continue, pay one account and leave another, go to another line Credit … There seems to be no end!
What to do? Find out if what started the problem was really urgent. And when you understand the real reason you will know what should be done going forward.
Thinking, analyzing and evaluating is always the best thing to do before any situation. There are times when you don’t have time to think about it, but when it comes to money, if you have an emergency reserve you can ease the despair. Another year will start and your financial future is up to you! We have created a simple spreadsheet for you to start your strategy.