Posted on: 22 August 2014
If you have filed for bankruptcy in the past and are again struggling with debt problems, you should seek help from a financial counselor. Through these services, you may be able to learn the techniques and strategies essential for staying out of debt. This is called credit counseling, and it teaches you the things you need to know to stay out of debt for good, including these three important principles:
Know Where Your Money is Going
When you sit down with a financial counselor, he or she may ask you if you can explain where all your money goes. Many people really have no clue where their money goes; they simply know that they don't have enough of it.
Through credit counseling, you will learn how to cut your spending habits by finding out exactly how you are spending your money. Bad spending habits might be one of your biggest problems. To do this, you will be instructed to write down everything you buy. This includes big purchases, but it also includes small purchases, such as a can of soda or a candy bar.
If you do this for an entire month, you can categorize all your expenditures, and this will give you a clear picture of where your money is going. You may find ways to cut your spending, or you may find that most of your money is going towards repaying the debt you owe.
Whatever the case may be, your financial counselor will help you determine a strategy to help correct the problems you have.
Save Something Even If It's a Little
The second principle you must learn is the importance of saving money. While it might be hard to save a lot of money if you are trying to dig yourself out of debt, you can still do it. You can start by saving $5 or $10 each week.
Once you get in the habit of saving and as you see your savings account grow, it may give you a greater incentive to continue saving a small portion of your income.
Use Cash Only
Finally, learning to live on cash only is vital, and it offers two main benefits. If you are standing in line to pay for something that you really do not need, it is much harder to part with cash than it is to swipe your credit card. By using cash for everything, you will really think twice about whether you need the item or not, and this could easily help you reduce your spending.
The second benefit is that it will help you avoid racking up more debt because you will no longer be charging your purchases.
If you track your spending, save a little, and pay cash for your purchases, your financial situation could greatly improve in just a few short months. For more help, make an appointment with financial counselor in your area.Share