5- MANAGING YOUR DEBTS ONE BY ONE

The hard truth may be that you can’t fulfill all of your financial commitments according to the loan agreement. Realize this and move on! For me, reaching this conclusion was the hardest part of this process. It was frightening because I didn’t know what would happen when I broke the agreement. Try to relax and take a deep breath, everything is going to be O.K..

Sometimes you just have to be creative. I had two vehicle loans and only needed one car. My father, on the other hand, was driving a ten year old Mazda B2200. Conveniently he just turned 62 and his Social Security checks began coming in. I didn’t have enough equity built up in either vehicle to sell without having to come out of my pocket. So I convinced my father to sell his old truck and take up the notes on mine. This is what we did and that freed up $300 per month, and Dad looked great in his newer Ford F-150. That helped. My student loan was financed through Sallie Mae. They have a deferment program where you can put off making monthly payments if you’re in financial trouble. So I took a 6 month break from paying them – during which time I consolidated my student loans and am currently only paying $120 per month. I would like to pay more but the consolidation loan has a much lower interest rate than BOA and Citi – they are at 32.6% remember?

I owed 11 more payments on my Mitsubishi. Since I had to have a car I decided to pay that off first. I decided to continue to pay Discover Card (for some reason they kept a lower interest rate – today 28%), and as for Bank of America and Citibank – they received a letter.… more

4- FIGURE OUT HOW MUCH CASH YOU HAVE ACCESS TO

If you’re like me you probably need as much money as you can earn and find. Let’s think about some ways to free up some cash you may have not considered. When I finally reached the end of my rope financially I had been with the same job for seven years. $1000 per week was my salary and was the best money I had made by the age of 30. Although I had a college degree I lacked specialized skills for the job market. Fear of quitting my job and the unknown aftermath was part of the problem. In order for me to rectify my credit in the time I wanted, more income was necessary. First of all, see if there are physical items or services that you can do without. Here is a list of things that you might be able to live without.

Telephone (land lines and cellular)
Cable TV or Satellite
Furniture or appliances
Pets
Video games
Musical Instruments
Real estate
Vehicle

This list can be much larger. However, these are some of the things that you can stop using (services) or maybe even sell for needed cash (physical items). I recently went on www.ebay.com and auctioned off everything in my house that I really didn’t need. Some of the items were musical instruments and video games – even some books. Just make sure that you charge the other party enough shipping or you will lose money there. I sold an electric guitar by advertising in the local paper. As it turns out I had more cash at hand than I realized!… more

3- START USING CASH TO BUY THINGS

When you use cash you literally see your money leaving your wallet. This has a psychological effect. I mean it almost hurts when you watch that money leave your hand. For those who need tough discipline, I recommend you should start putting your cash into envelopes. You have a separate envelope for each spending category. At the beginning of the week go to the ATM and withdraw your budgeted cash for the week. Then sit down and put the amounts per category into the envelopes. This only works if you don’t spend more than what is in the envelope. This really helps people learn to control their spending and stick to the proposed weekly budget.… more