Dealing With Debt Can Be A Mental and Mathematical Issue
By now everyone’s heard that word the worst economy since the Great Depression, while not certain of that, but one man’s bustling economy can be another man’s depression, and whether or not we’re actually the worst economy since the Great Depression really is irrelevant to the person who hasn’t been able find a job for six months with a single mother wondering how she’s going to feed her kids.
I’m generally not known for being able to give coping tactics on financial trauma, but there is one thing I know for certain, knowledge is power and the more you understand about your financial situation, the less uneasy you will be about it. If after this article you still find yourself in need of some more help (there is nothing wrong with that, everyone needs to talk to someone at one point or another), check out my friend James Valeri’s web-site Jim Valeri, Counselor for more ways to cope with debt stress.
The focus of this article will be aimed towards the employed person or the person who works for themselves. My best suggestion to the person who finds himself unemployed is to treat his or her job search is a full time job. It’s cliché, but it works, and I’ve never been unemployed more than six weeks when I made looking for a job a full-time job.
For whatever reason, people find themselves under financial burden, and while a lot of the times these injuries were self-inflicted, the point here is not to assign blame, but to find simple, no-nonsense solutions to our financial problems.
Knowledge is power, so the first thing that you need to know, is exactly how much money are you bringing home from your job. Most people know that, but there are some people who get direct deposit and it’s to the point where they don’t even know what they make, that’s a bad position to be in.
Once you know how much you bring in each pay period, I want you to look at your 2008 tax return. Did you get a large tax return this year? If you did, that wasn’t the government’s benevolence, that was paying you back for overpaying your taxes during calendar year 2008. I routinely see people in my office who have $5000 – $6000 tax returns. If you’re getting a $6000 tax return, you essentially want the government $500 per month interest free for a year. That’s your money, don’t lend it to someone for free, especially an organization that spends $900 on a toilet seat.
If you’re overpaying significantly in taxes and getting a large tax refund every year, go see your HR person and have your holdings adjusted so that you’re getting more of your money each month when the government is getting less. Sometimes that simple move will get someone out of financial dire straits on their own.
If you all $1500 on your Discover card, and you’re struggling to find a way to pay, you fixed your tax withholding, you’ll have more money to pay that debt off, and the sooner you pay that debt off the less likely you will be to fall even further behind on your Discover card.
The next suggestion I have is to make a list of everything you spend money on for a week. That might seem silly but I did that in January, and I learned that I spent $30 at Starbucks, $18 at Joey Vento’s Gino’s Cheesteak’s, $120 at Merchant’s Square Mall, and almost $50 on various fast food (we have lots of health food in Philly). That was almost $200 a week on crap.
Rather than spend $30 at Starbucks, I bought an iced tea brewer for $25. My iced tea costs around six dollars per month and it’s much healthier too. I’m not going to say that I completely kicked the Starbucks habit, but it’s not a once a day thing anymore. I didn’t give up Gino’s completely either, but it’s become a once a month treat rather than a three times a week deal, and I didn’t give up fast food totally either, but the sandwiches I make are just about as good as what McDonald’s can come up with and for a fraction of the price.
I confess that the $120 I spent At Merchant Square Mall was just crap, I haven’t completely kicked that habit either, but definitely more aware of when I spend money at that place and now have the good sense not to go in just to say hello.
I’ve been able to lower the amount of money spent on crap per week from $200 to around $50, and the $150 savings per week is going towards paying my car off that much faster, and when this is paid off I’m going to knock out another car loan, I have a strategy for that as well, but that’ll be a subject of another post on another day.
The bottom line is most people would come see me don’t really need bankruptcy, they needed their financial house in order, the best way to do this is to figure out how much you make, how much you spend, and prioritize to determine whether you really do need the help of a bankruptcy lawyer were just a little bit of self control, because I assure you if you do not take control of your financial situation you will need my help and it will be sooner rather than later.
If you need help coping with your debt struggles and you don’t know where to turn to, please check out Jim Valeri’s site Jim Valeri, Counselor, and then when you are ready to get on the road to financial recovery, email me at jim@padebt911.com or call me at 484-661-2891 to schedule your free, no-obligation consultation.
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Comments
Jim,
I know what you mean! I haven’t been unemployed for more than a few weeks myself, and I’m usually able to find something if I make it my focus. Sometimes I didn’t always get the job I wanted, but I got something, and it took care of the bills.
I have plenty of clients that are unemployed right now, and I tell them all to do what you can to stand out. If ten people are applying to the same job you are, how can you be different and better than them?
Good stuff. I’ve been reading for the last few weeks, and I’ve learned a lot. Keep it up!
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