Debt problems and thinking “I don’t know where to start” – Payday Loan Consolidation
Since my job means that I work with a site like this and some others that are focused on this with debts and what you can do to get out of them, I think it is part of my job to look at the Luxury trap. There, participants are often heard saying “I don’t know where to start”. This I intend to look at here.
The idea is that if you have read what I write here you should never ever be able to say so if you are in financial trouble. With this I do not say that what you read here is the solution as the problems can be too big. However, I am briefly going to say how to get started.
What the situation looks like
The very first thing you have to do is to get an overview of what it looks like at the moment. Just like they do in the Luxury Trap with their budget board. We ourselves have a budget tool here on the page that you can use.
Whether you choose to use our tool or not, you should find out exactly what the money is going to at the moment. Important here is not to lie to yourself or guess where the money is going. Check receipts, bank statements etc. to find exactly where the money goes.
If you have a loan, make a list of these where you write the size, interest rate, amortization rate, etc. for the different ones. Something that you then use when deciding which is most important to get rid of quickly.
Once You’ve Figured Out Exactly Where The Money is Going, It’s Time To Evaluate The Situation Right Now
Regardless of how you choose to spend money, you must come down to such a position that you go plus minus zero. Since saving here is counted as a form of expenditure, one should preferably also include one.
When you look through the numbers and see that you spend USD 5,000 a month on food even though you are only two living together, it is a good place to pull down, for example. Eating for USD 1,500 per person per month is no problem at all which would be a saving of USD 2,000 for example. If there is a lot of money on gasoline, sweets, snacks, magazines, fun or whatever you see here.
You simply have to find things to pull down so that the economy goes together. It can be sad to not be able to go to the cinema as often as you used to. If you pull it hard, it is to get the economy together or end up at Kronofogden.
Then it should be said that you have an alternative to cutting costs and that is to increase revenue instead. Whichever way you do doesn’t matter as long as it eventually merges.
When You Have Looked Through the Economy and Found Where the Money Should Be Saved, It Is Important To Grab It All and Really Live By It
If you have spent all the money that was budgeted for pleasure and it is two weeks left in the month, you simply can not indulge in the entertainment that costs money. Maybe there is money left in the food budget and then the pleasure may instead become a home evening with some movie being shown on TV and a bag of chips.
Then try to pay off the most expensive loans first. If you can repay a little extra there every month, it does a lot for the total cost. And remember that once you have a budget that goes together, it will only get better over time if you have a loan that needs to be repaid. For every penny you amortize, the monthly cost drops. Then maybe it is only about USD 50 each month but in the longer term it is also money. The ones that you can later afford to put in a little more money for pleasure and thus can go to the cinema. Or you save the money or use it to make an extra amortization.
Hopefully, I have briefly explained here how to start to get out of the trap. It’s not very difficult and it only takes you an hour max to find out how everything is. And this is definitely worth it. Just grab it all and it will soon be better.