Have You Hit Rock Bottom?

There may come a point when you hit bottom when you it comes to your finances. Once you do this you really have two choices in front of you. The first one is that you can complain and scramble around hoping for a way out, but you are really failing to learn the lesson. The second is to get up and begin working harder than you ever have before to turn the situation around. Generally you can turn the situation around. If you do this it is important to commit to yourself that you will never allow yourself to be back in that situation again. Here are five things that you can do to pull yourself up from rock bottom financially speaking.

1) Stop spending unnecessarily. This may sound obvious, but it really can be difficult for people to do. If you are truly at point where you can not pay your bills and provide the necessities of life for your family, you need to stop spending. You only buy food that you cook at home. You stop shopping. You can find clothes on sale, at consignment shops or at yard sales. You do not need the latest gadget, gizmo or that new car.

2) Next you need to get rid of all your stuff. You know what I mean. The stuff you bought that got you into this mess. You can hold yard sales, sale on Craigslist or eBay. You may be surprised at how much stuff you really do have. You will experience two benefits from this. One you will earn money that you can apply to your debt and it can be a big relief in this situation. Second, my father once told me that your stuff owns you as much you own it. Freeing yourself from the extra clutter and items is a very freeing. You may find that you have more energy and less worry.

3) You will need to work hard. This may mean putting in overtime or picking up an extra job in the evenings or on weekends. You may find that you can make more money freelancing, then you would if you found a minimum wage job. You will also work harder at home since you will be cooking your own meals. If you have a housekeeper, you can save money by doing the cleaning yourself for a little bit. You may need to cancel your lawn and yard service. You will know the areas that you can make the cuts in.

4) You and your spouse need to take a long look at the decisions that put you in this situation. Then you need to find ways to change this behavior. If you get a system put into place, you can stop this from ever happening again. Once you are out of debt and saving you may relax some of the rules, but it is important that your overall lifestyle fits with the philosophy of saving and budgeting carefully.

5) If you need to talk to your creditors to see if you can have fees reversed and interest rates reduced. This can make a difference in how quickly you pay down the debt. The credit companies may be willing to help you settle debt if you are behind on your payments. They are usually willing to work with you if you tell them about your situation.

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