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5 Steps that Will Help You Cope with Your Debt

5 Steps that Will Help You Cope with Your Debt

There is an old saying that goes something like this “He who goes borrowing, goes sorrowing”, and I couldn’t agree more. In the good old days, borrowing was considered the last resort for a person in need, but nowadays it seems that everybody has some sort of debt, no matter how small. Our society is built upon the idea of credits and loans and the more you take, the more you need. The more you have, the more you want. And no matter what we do, we end up paying the price, sometimes for years. Chances are that at some point, some fancy guy in a suit will knock on your door and take everything you have. Luckily, all problems have solutions. So in order to get out of debt, or at least limit your debt, there are 5 steps that must be taken.

Step #1: Make Your Problems Your Priorities

It doesn’t matter if you work for a minimum wage or earn a decent living. With all these temptations, it is hard to stop getting loans and credits. The truth is that debts have become a normal part of our lives according to recent studies, and we are more often than not tempted to take on more than we can handle.

And although there is nothing more rewarding than standing on your own two feet, it is hard to do it with no debt whatsoever. College life is expensive, so you choose a student loan. Then, you want your own apartment or house, you get married, you have kids, you need cars and a change into the household appliances every now and then. And many people don’t get rich overnight, nor do they win the lottery or land on a gold mine. So credits and loans are the only solution to lead a normal life, like everyone else. But unless you want to spend the rest of your life paying interest, and worrying about your overdo payment, you have to take steps to dissolving your debt. Make the clearing of all your unresolved financial issues a top priority, and no matter what interference might occur, stick to your plan.

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Step #2: Stop Spending Your Money on Useless Stuff

It isn’t easy to embrace the frugal lifestyle, but nowadays there are so many resources and living examples of people who did it and who are living a care-free life, that you can’t be scared of trying it yourself. You know the saying “less is more”, so try applying it in your own life. Do you really need to buy all the junk you find in stores? I know you love chocolate, and you’re craving for a dinner out in the town, but you should focus on things that actually matter if you ever want to start moving forward. And it’s not a matter of giving up, it is a matter of simply clearing that cloudy sky and making a difference in your lifestyle, by creating balance. Balance leads to well-being.

Plus, you’d be amazed at how much money you can save if you put a little effort into it. Here is an idea to experiment: every time you go into the supermarket, try to think if you really need a certain item, and if you don’t, put the amount of money you would have spent on it somewhere else. Check that little deposit in a few weeks. And smile.

Step #3: Dealing with the Reality of Debt

If you accepted the fact that you have a debt problem and that you have to stop spending money on things that lack importance, the next step is to actually deal with the reality of debt. This means understanding the fact that although the bank may be offering you loans and credits for personal needs or for business needs, it certainly does not hold back from taking it all away when payments are not made in time. You go from wanting it all to losing even the little you had.

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There are many online resources and finance blogs that can advise you how exactly to deal with your debt in your country and which debt tools to make use of. In Australia, for example, debtconsolidation.com.au shows us that consolidation tools such are repayment are the most preferred ones. A repayment plan of your home loan would look like this:

    In other countries, people prefer to make one big loan, so they can cover all the other small ones.The most important focus of this strategy is that you will no longer risk missing payments and getting into more problems, because there is only one big problem that you have to worry about. It might sound a bit harsh, but having just one problem to deal with can be a life saver.

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    Step #4: Write Everything Down, Keep a Check List and Open a Savings Account

    It may not sound like the best advice, but writing down all your costs and profits will significantly help you manage your money. How exactly, you might wonder? It is simple: if you are diligent, and never forget to write everything in a notebook, you will be able to make a grand total at the end of the month/week, and see exactly what it is that is burning a hole through your pockets. To add more, try keeping things organized in a check list, so that you know what is a must and what can be saved for later. Organizing your spending budget is a key part in preventing new unwanted debts.

    Remember, we want to deal with each problem at a time, so preventing unwanted problems is also a smart way of living. Each time you managed to do something, even if it is just a simple action as to giving back some borrowed money, check list it. But what about holidays and expenses? Well, open up a savings account. Be it for Easter, Christmas, or other holidays and birthdays. It’s better to plan ahead. So if you want to spend some money, but not over do it, then this is the answer. Wondering what to do and where to “cut” from, so you can save money? Scroll up to Step 1 and read the experiment suggestion again and then come back to Step 5. Now you know where to start.

    Additional Pieces of Advice

    1. Never Give Up

    It takes a few weeks to get into serious debts, but you might be paying for this mistake your entire life. Nevertheless, if you have found yourself in a truly dire situation, where everything looks as though it could come crashing down in the blink of an eye, try to remain calm. Put your patience hat on, stay strong, and try to make the best out of what you have.

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    2. Stay Positive

    Optimism is the key to give peace to our minds. Nothing good will come out of stressing yourself. Remember that important lesson in math class: every problem has a solution. Stay focused and find it through creative realistic ways. But before that, keep your mind sane, so that it functions to its full potential.

    3. Carefully Choose Your Words and Your Actions

    Think, before talking and acting. Your actions can have side effects on your happiness and on the happiness of your dear ones. There are so many people who are consumed by their financial issues and still fail to understand that money does not bring happiness and luckily, there still are plenty of things money can’t buy.

    Word of advice: never joke around or say “I am forever in your debt” to a bank representative. He might take your word on that one.

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    Last Updated on January 2, 2019

    How Personal Finance Software Helps You Get More Out of Your Money

    How Personal Finance Software Helps You Get More Out of Your Money

    Do you know what mental health experts point to as the biggest cause of stress in the United States today? If you said “money,” then ding, ding, we have a winner!

    Three out of four adults today report feeling stressed out about money at least part of the time. People are either worried about not having enough money or whether they’re putting the money they do have to use in the best possible way.

    Your money is either in charge of you or you’re in charge of it, there’s no middle ground. Using some type of personal finance software can help alleviate some of that money stress and better allow you to manage your money effectively. Without it, you may just be setting yourself up for constant financial worry. Life is already tough enough and there’s no need to make it more difficult by simply hoping your money issues will all work out in your favor. Hint: they won’t.

    This guide will help you to understand how personal finance software can better assist with both accomplishing long term financial goals and managing day-to-day aspects of life.

    Whether it’s tracking the savings plan for your child’s college fund or making sure you won’t be in the red with the month’s grocery budget, personal finance software keeps all this information in one convenient place.

    What Exactly is Personal Finance Software?

    Think of it like the dashboard in your car. You have a speedometer to tell you how fast you’re going, an odometer to tell you how far you’ve traveled, and then other gauges to tell you things like how much gas is in the tank and your engine temperature. Personal finance software is essentially the same thing for your money.

    When you install this software on your computer, tablet, or smartphone, it helps to track your money — how much is going in, how much is going out, and its growth. Most personal finance software programs will display your budget, spending, investments, bills, savings accounts, and even retirement plans, levels of debt, and credit score.

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    How It Leads to Financial Improvement

    It shouldn’t come as a surprise, but people who regularly monitor their finances end up wealthier than those who don’t. When you were a kid, keeping track of all of your money in a porcelain piggy bank was pretty easy. As we get older, though, our money becomes spread out across things like car payments, mortgages, retirement funds, taxes, and other investments and debts. All of these things make keeping track of our money a lot more complicated.

    Some types of personal finance software can help make things a little less complicated, setting you up to meet financial goals and taking away some of the stress associated with money.

    Even if you already have a Certified Financial Planner (CFP) some type of personal finance software can be of great benefit. Whereas CFPs focus on the big picture of your money, they don’t handle the day-to-day aspects that determine your overall financial health.

    It’s also not nearly as complicated as you might think and can take out a lot of the tedium that comes with doing everything on an Excel spreadsheet or with a pad and pencil.

    Types of Personal Finance Software

    When it comes to personal finance software, it generally fits into two categories: tax preparation and money management.

    Tax preparation software such as Turbo Tax and H&R Block’s software can help with everything from filing income taxes to IRS rules and regulations and even estate plans. Plus, there’s the benefit of filing online and getting your refund check a lot faster than if you were to mail off your forms after waiting in line at the post office.

    For the purpose of this article, however, will be focusing more on the personal finance software that aids with money management.

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    Money management personal finance software will help you to see the health of your cash flow, pay down debt, forecast for expenses and savings, track investments, pay bills, and do a host of other things that 30 years ago would have practically required a team of accountants.

    When to Use Personal Finance Software

    So far we’ve gone over what exactly personal finance software is and how it can be a benefit to your money. The next logical step in this whole equation is determining when it should be used and how is the best way to go about getting started using it.

    Below are four of the most common and practical ways to use personal finance software. If all or any of these apply to you and your money, then downloading some type of personal finance software is going to be a smart move.

    1. You Have Multiple Accounts

    There’s a good chance that when it comes to your money, it’s in more than one place. Sure, you probably have a checking account, but you may also have a savings account, money market account, and retirement accounts such as an IRA or 401k.

    If you’re like the average American, you probably have two to three credit cards as well. Fifty percent of Americans also don’t have loyalty to just one bank and spread their money across multiple banks.

    Rather than spending hours typing in every detail of every account you have into a spreadsheet, many programs allow you to easily import your account information. This will help to eliminate any mistakes and give you a bird’s eye view of everything at once.

    2. You Want to Automate Some or All of Your Payments

    Please don’t say that you’re still writing out paper checks and dropping each bill in the mailbox. While it’s noble that you’re doing your part to keep postal workers employed, we’re 18 years into the 21st century and you can literally pay every bill online now.

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    There’s no need to log into every account you have and type in your routing number either.

    With personal finance software you can schedule automatic payments and transfers between all of your imported accounts. Automatic transfers will help to make sure you have the necessary funds in the right account to ensure all bills are paid on the appropriate date. Late fees are annoying and do nothing but cost you money. It’s time that you said goodbye to them once and for all.

    3. You Need to Streamline Your Budget

    Perhaps the best feature of personal finance software is that it allows you track everything going in and out of your virtual wallet.

    Nearly every brand of personal finance software out there has easy-to-read graphs and charts that allow you track every cent you spend or earn, should you choose. You might be pretty amazed when you see just how much you spent on eating out last month or if you splurged a little more than you should have on Christmas gifts last year.

    Every successful business on the planet has a budget and using personal finance software can help you trim the fat on your spending in ways that affect your everyday life.

    4. You Have Specific Goals to Meet

    Maybe it’s paying off debt or saving for up something like a European vacation. Whatever your financial goal is, whether it’s long-term or short-term, personal finance software programs are one of the savviest ways to go about reaching those goals.

    You can do everything from set spending alerts to notify you when you’re over budget to automating what percentage of your paycheck goes to things like retirement investments. The personal finance software that you choose should show you exactly how close you are to hitting those goals at any given time.

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    How to Get Started

    From AceMoney to Mint and Quicken, there ’s no shortage of personal finance software apps out there. Many of these programs are free to download and will allow you to pay bills, invest, monitor your net worth and credit profile, and even get a loan with the swipe of a finger.

    Other programs may only offer you limited services and will require a one-time fee or subscription to unlock all that they offer. These fees can often vary from as little as two dollars to 50 bucks a month.

    It’s best to start off with the free version and then gauge whether you’re able to accomplish everything you’d like or if it’s worth exploring one of the paid options. Often times the subscription programs come with assistance from financial planning and investment experts — so that can be a real benefit.

    When deciding which personal finance software program to use, it’s also important to look at how many accounts you wish to monitor. Certain programs limit the number of accounts you can add. Be sure that if you have checking, credit card, and investment accounts to monitor, that you choose a service that can monitor them all.

    Finally, when looking around for the right personal finance software that meets your needs, make sure that you’re comfortable with the program’s interface. It shouldn’t be expected that you recognize every single feature instantly, but if the features don’t seem readable and manageable to you, then you’re not as likely to use it and get the full benefits.

    Final Thoughts

    Personal finance software can go a long way in helping you to take control of your money and meeting your financial goals. It’s important to note, however, that some focus more on budgeting and expense tracking while others prioritize investing portfolios and income taxes. Explore several different programs and read reviews to find the one that’s right for you.

    In this day and age, managing one’s personal finances in a secure manner that allows the user to have a real-time visual representation of their money is easier than ever before. With the numerous applications that are out there — both free and subscription-based — there’s no reason that every person can’t take control of their money and ensure they’re making smart money moves.

    Featured photo credit: rawpixel via unsplash.com

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