Financial Resource

There is no greater threat to your financial future then having to deal with overwhelming debt. Nothing can interfere with you plans quite like owing other people lots of money, money that you could put to use through investments, savings, paying for school, or even just blowing some actual cash on yourself. That’s the problem with borrowing money through the use of personal loans, car loans, and credit cards; once you start paying that interest its money that is now working for your creditors instead of you.

If you are reading this then you are probably one of the millions of Americans who desperately want to become debt free. There is no quick and easy way to accomplish this but if you put your head down and attack your debt like your life depended on it in as little as 3 years you can be completely debt free.

So how do you do this? The first thing you’ll need to do is take a debt inventory. As bad as that sounds it is something that will need to be done if you want to get a handle on your financial situation. There are two ways to do this. You can either just list out all your debts or you can build a budget that includes all your income and expenses, including debts. A budget is the better way to go as it allows you to start taking back control of where your money is going and get some of those more unnecessary expenses under control.

There are many reasons you could be in debt but the most common problem is the fact that you probably spend more then you make. But even if this is the case do you know why this is happening? Where is your money going? Until you get that figured out you will continue to be financially lost.

So take that first step to becoming debt free and make a budget. Just get out a pencil and paper and write down your income in one column and then write down all of your expenses in the next column. Add up the two columns and those two numbers will tell you how well you are doing financially. If the income is greater then the expenses then things aren’t too bad. If the expenses are more then the incomes then you have found the primary reason for your financial problem.

If you want to add another level of sophistication your budget you can ad in more information about debts that include interest and monthly payments. These include mortgages, car loans, student loans, and those evil credit cards. In this case you will have columns for the balance owed, monthly minimum payment, interest rate, and interest being paid each month. Chances are if you are deeply in debt these are the reasons why.

Here’s the thing about making a budget. It isn’t the greatest of fun and the results can be somewhat depressing but if you have never made one before it will show exactly why you are having financial difficulties because it’s all laid out in front of you.

The next step to become debt free is to act on what you see in your budget. Your monetary problems are right there in front of you and it’s time to start performing some financial surgery. Start cutting and eliminating bad spending habits to free up money that can be put to use reducing those debts.

You will have to make a conscious decision to live on less then you make and apply any savings to fixing you financial problems. And if you are serious about being debt free get rid of those credit cards. Don’t just hide them in a drawer; you have to destroy the things in whatever manner works for you. Credit is not your friend when your debt is destroying your future.

The first steps to become debt free are simply taking back control of your money and telling what to do and where to go. Once you have done this by building a budget and seeing how lost control of your expenses you can start down the road to financial freedom.

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