Debt Resolution-Following Through

When you started out on your own in the world, you had no idea just how serious debt could be. Your basic needs were to survive and have fun in the process, never realizing these debts you were accruing then would haunt you for years to come. Then on top of those previous bills, you now have a mortgage and a car payment. How do you handle this?

First, take charge by listing all your bills and debts. Include in this, all your signed loan agreements, and statements. Be sure that all the information needed is right at your fingertips, and then proceed.

The next step is to look at the liquid assets you have. This does not include any retirement plans or company stocks you may have. This is just the assets that can be converted to cash on hand for purposes of figuring out the budget you have to live on daily. This could be your paycheck from work, any benefits you receive from a possible ex-spouse or monies from other places such as small businesses or partnerships.

Place this income list next to your debt list. Try to think of other income avenues that you may have overlooked, or think of other ways to create income. Do you have a skill or product that you can market? Anything simple to generate income can add up quickly. Create another list, calling it something such as “future income”. Add this to the two lists you already have.

Take a break for a bit, returning to this work later. This will give your mind a rest, and then when you return, remembering other bills, or more ways to generate income will come easier. Walk away and do something else. But, remember, this is important and you must return to this task to accomplish what must be done.

After you have all the amounts you can think of, add up the lists. Add your bills, add your incomes. Once the two amounts are totaled and in front of you, it should be apparent which direction you need to go. Do you need to increase your income, do you need to decrease you bills, or are you close to being safe? Maybe you can even open a savings account.

But, if your debt amount is quite a lot larger than your income, don’t view this is as a excuse to get another loan to pay off all the bills at once. This is not the answer! This is the exact reason most people get into the debt trap, by borrowing over and over again, just to get by each month. If you are tempted, or have already done this, it may be time to seek professional help. debt management programs are wonderful in helping you manage any outstanding debts, and getting control of your finances again.

Be assured, starting debt resolution as early as possible is life enhancing. Learn to do this and start saving instead of spending. Save for your retirement years, or even for that vacation you dream of. It’s possible, if you take the necessary steps now.

©2009 GuideForDebtElimination.com