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Down on your luck? Burdened with bills?
There are a few steps you need to take to get back on track, say experts.
Start saving–immediately. Also work on re-establishing your credit. If you are not saving at least 5 percent of your salary, you’re spending too much of your income. A savings of 10 percent is actually more advisable. You almost need to establish an emergency fund.
“The two can be done simultaneously, but they are different goals,” McClary says. Make an effort to have six months’ worth of net income in the bank. And, rebuild credit. “The most important thing is making timely payments on accounts that are up to date. It takes consistency,” he says.
Take your time. This is going to be a process, realize and accept that. And part of the process is changing your spending habits.
“This can be as innocent as going out to eat when you’ve already exhausted your restaurant fund for the month, or as extreme as paying rent you can’t afford in order to keep up with your friends,” says Ruth Soukup, author of
Living Well, Spending Less: 12 Secrets to the Good Life.You may also be living too high on the horse if you carry a balance on your credit card. Pay off the balance each month. And take a look at your car. Can you really afford to lease that ride?
Get it together. You will need to be organized to get your money flowing right. According to Rachel Rosenthal, a professional organizer and owner of Rachel and Company, even organizing your bedroom closet and developing a system for getting dressed in the morning can save you time and money because you know what’s in your closet you don’t buy more items own.
Know what you’re dealing with. Look at all your debts and your income. Bruce McClary, spokesman for the National Foundation for Credit Counseling, tells Yahoo, “Look at your budget, and see where things are. You’ll see a lot of wreckage, and it might be a long journey in front of you, but you need to know the first steps,” he says. A credit counselor from a NFCC-member agency can help you for no or low cost.
Do you have any useful tips for correcting your financial course?
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