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What to do when you are financially in over your head?

So you just added up your credit card statements, and you got that sinking feeling.What will I do now?

Our society is run on consumerism.We have seen in the last year, that without it, the US is sunk.But what if you spend more than you make?What can you do? Here are a few tips:

  1. Change credit cards. If you still have good credit and receive zero interest credit card teasers in the mail, it could be a good thing. Try rolling over your debt onto a zero interest card, temporarily. This can give you a little time in paying off the debt before accruing more interest. However, there is a danger. If you do not change your spending patterns, you will be worse off than before. Use the new card in your strategy to eliminate your debt, not incur more. So, this means that you may have to cut up all the other cards until you arrive at a zero debt level.
  2. Pay cash and stop using credit. Pay cash for as many things as you can without running your bank balance into your overdraft account. This can really teach you how much you spend each month, and on what items. There are few things more sobering than seeing your cash disappear out of your wallet.
  3. Try to cook most of your meals. Yes, yes I know. You can't cook. But, the internet is full of quick recipes that can make you a real chef Boyardee in no time. If you must go out, go to restaurant.com and get discount coupons, or buy an Entertainment Book. This way you could cut your dining cost in half, and still enjoy yourself. In this economy, even 5 star restaurants like Lawry's the Prime Rib are offering deals. Look for them
  4. Don't borrow money from friends and family. They don't need your problems, and it may be the last time they talk to you for a while.
  5. Make a cash flow. Schedule out your expenses each month, and consider where you can cut. Be honest with yourself. You want to be debt-free before the holidays, in which at that time you can spend responsibly on gifts.

We work with our clients on their cash flow.Cash has been and always will be king.

 

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