You know that you need help when your FICO scores are falling faster than the Dow Jones, and your standard of living is fast going from a state of you being able to wear the latest, richest fashions, down to you needing to put up with threadbare apparel from 3 years ago. You know that you need to unlearn the patterns of old spending habits when not only are your credit scores keeping you from being able to snag that prime credit card, you are feeling it in the fact that you need to keep your groceries down to 1 bag a week, when, in previous weeks, you'd go for four bags or five.
And when you need help in these areas, what do you do, then? Do you drop to your knees and cry your eyes out and make your throat sore from all that yelling for being angry at yourself, your spouse, the economy, or the system? Well, honey, this is a very pointless exercise. You have to get up and do what you can to resurrect your finances and your credit score.
So what do you do, when you are in this state of finances, or lack of it?
Find out how dire your circumstances are, by checking your FICO score at myfico.com.
Start a budget. You know you need a budget, and you have to make one. Now. No excuses, no procrastination, just get to it. You Need A Budget or YNAB is a budgeting software that works with other budgeting software. It's simple, no-fuss, and a lot of people have overcome their financial problems with the help of this. Here is a full YNAB review, to help you learn more about YNAB.
If you need a more robust tool, with the capacity to help you track not only your income and expenses, but also your net worth, your investments, business transactions, even your rental property and taxes, then allow you to pay your bills directly from the software, Quicken personal and professional budgeting software is the financial management software that would address these other needs. For those who need all that, this may be more helpful than YNAB.
When you're ready to start hunkering down to chopping debt off of your life, you would have to make a provision in your budget for savings. While you're still in the process of hacking off your debt, you should never neglect building a savings account. This way, little by little, you'll grow your nest egg while hacking the anthill that you need out of your life (debt). When you've whittled down your debt to at least ¾ of what it originally was, or when your savings could meet the minimum requirements, maybe it's time to start considering enrolling into a high-yield savings account like Everbank. Everbank is a stable national bank, and its high-yield and foreign currency accounts are FDIC insured. Should you need more information on Everbank, here is an Everbank review.
Start giving at least 10% of your income. Even if you're not spiritual nor religious, the principle of sowing and reaping, and of receiving many times over when you give generously, has been proven over time. Give to the charities and missions whose mission, vision and principles resonate with your own, and see if this works in your life.
Make sure that not only do you not neglect your savings, see to it also that you start to build your emergency fund. This savings fund should have at least 6 months worth of your salary, to make sure that in case anything happens, you won't be left penniless. If this sounds like you'll be way in over your head with building this, don't get overwhelmed. Start small. Work with a smaller target first, like being able to build $1,000 as a starter for your emergency savings, then just keep allotting an amount that you'll put into this fund, until you've reached your target for this. Don't touch this account for purchases, however. “Emergency” means “emergency,” and unless you have no other fund to use for a minor emergency, like a computer breaking down and your need to replace it, don't ever touch this. This is a break-in-case-of-fire-or-major-economic-downfall-or-retrenchment fund. Do not touch.
The tools we have outlined would be good for you to jumpstart your financial recovery. What would take you the rest of the way, however, would be your drive to see yourself through to financial recovery, and the perseverance to pick yourself up, brush yourself off, and keep going, when tough times come. When you have these tools: our suggestions, and the character traits I described, you will surely make it to your goal of financial recovery. Eventually, we're sure, that if you keep going, you'll get to the state of financial freedom.
Here's to your freedom!
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Budgeting To Stay On Target
