When you clean your credit this can be a scary proposition, especially when you have no clue as to what direction to take from the start. A financial plan is necessary once you have committed to paying off debt, adding good accounts and disputing the information which is incorrectly added to your credit report. Taking the time to set a plan of action for the good of your financial health, in an effort to avoid getting yourself into the same financial mess in the future, is an excellent move.
This plan can be as simple as obtaining counseling around spending and money management tactics, or maybe something a bit more intense such as hiring a money manager or possibly freezing your credit cards for the time being. Right now it is a great idea to start thinking about methods which will get you into a habit and practice of spending smart and efficiently.
The money you work hard to earn each day needs to be respected, and I don’t mean in a spiritual way such as chanting for the good of money. Respect it in such a way you are not being wasteful, you should be able to enjoy life with it, within reason. There is an old saying “A fool and his money are soon parted” – don’t be a fool, use your money wisely.
As we have said before in other articles, many people often find themselves living beyond their means and as a result find it hard to reel back in, after a financial crisis hits. Changing your financial habits is sort of like dieting, if you deprive yourself of no spending, you are prone to failure as you will go crazy and over spend when you get some extra money. You need to make sure you keep grounded with some good common sense and follow a path somewhere in the middle.
As you are working through your plan of action to pay off your debts in full, as well as other aspects of debt management, there should have been a point where you kept track of your daily spending. It is a good idea to bring that information forward so you can see where your money was going, and how you could conserve and learn from that information to pay off your existing debt.
This report or list we are speaking of is called your spending plan, lets take another look at this with a different point of view. Part of the exercise that we put you through in another article was to use your spending plan to live by, living without any extras, basically in complete deprivation. Now is the time to find balance in your financial life. One of the objectives of this exercise was to have you build a more solid sense of what is important and what you could actually go without. As an example, do you really need to spend $7 every day on Tim Hortons or Star Bucks coffee when you are trying to improve your health. Of course not, as you are only sabotaging your health and still wasting money.
Forget about the fact we are using coffee as an example, no offense to the coffee drinkers, we are just trying to illustrate a point which hopefully you can relate to. Go back through your list and put an X by the things that were unnecessary. These things will also represent what you have learned to live without and then highlight the little things you missed. If the missed items are still a part of your monthly budget then you should now look for ways to cut them down a bit. As we mentioned one time before, if you find it hard to live without a salon visit for hair and nails, try this strategy:
Instead of going once a week, try going every two weeks. The one thing I have found in our family is stylists and nail technicians all understand ways to make your haircut and manicure last longer. Give it a try, take advantage of this and save a little money - after a few months have passed take note to see how well this strategy is working.
When we talk about how to clean your credit, it is important for you to know what areas of spending you can survive without and how to make your money stretch a bit further so you can live within your means. Once you get into this groove you can relax a little and continue on your journey toward a brighter financial future. It only takes a few little changes and a bit of self-discipline to find yourself on the way to starting new healthy spending habits and getting rid of the old costly ones. Continue on this path of success and always keep in the forefront your goals and desires of what you want to achieve, such as a Luxurious Mediterranean Cruise!