by
Carl Hampton
01/03/2007
You come home after a long day at work
only to find numerous unwanted bills in your
mailbox. As you sift though them, you start
to get that sinking feeling. You know there
is no way you can afford to pay all of them
on time. It's at this time that you remember
that you have a vacation coming up and you
want to make the most of it. What you really
need now is a money makeover and this is how
you do it.
No makeover is ever complete without a
before picture. Take a financial snapshot,
sometimes called a net worth statement.
Imagine you are going to sell everything you
own and you are taking that money to pay off
all your debts and normal monthly expenses
like rent, cable and telephone bills. Then
count what is left, if you didn't know what
net worth meant before, you sure will now.
The next step to take is to make a plan. You
need to write down all the steps you need to
take to achieve a goal. You're finances
should be reasonable, specific, and
realistic. There should be a time frame for
all your goals so that you know that you can
handle all those payments that need to be
made.
This step is going to be the most difficult.
You really have to stop spending! That means
most if not all those luxuries must end, the
manicure or pedicure, the monthly hair cut,
the shopping every payday, that all has to
stop. You are never going to get financially
caught up if you just keep spending!
If and when you do spend, which should only
be for necessities at this point like
groceries, keep track of what you spend.
Write down everything, this will give you a
good visual like a monetary blueprint. You
might even be able to find ways to cut
corners and save.
And that is ultimately what everyone needs
to do. We all need to save, it never occurs
to people that an emergency can come up and
you will need extra money to cover them. Let’s
say you need to go to the doctor and it
turns out you need surgery. You need to be
able to cover the costs that your insurance
coverage does not and you need to be able to
survive for those days you are recovering
and not working. What happens when you get
into a car accident even though it's not
your fault? You should have money on reserve
so that you are not digging yourself a hole
you may not be able to get out of. Using
credit cards that you cannot afford to pay
off in full at the end of the month is only
delaying the problems.
One way to save is to downsize. If you are
struggling with your mortgage move into a
smaller home or an apartment. You could try
renting out a room. Sell what you don't use,
unless it's a family heirloom. I know you
probably have a desk, table, or even
computer around the house that doesn't get
used at all. You might have baby clothes
that don't fit anymore. You can use websites
like ebay.com or i-soldit.com or you can go
the more traditional route and have a
yard/garage sale. It will be successful and
you will have extra cash in your pocket.
Along the lines of selling, if you have two
cars, get rid of the one you use the least.
When you do you will have what seems like a
fortune because you don't have to spend your
hard earned money on the car payments,
insurance, registration, and gas.
To find out what you are worth, go to
http://www.bankrate.com/brm/savings-advisers/net-worth.asp.
Have an opinion or a question you would like
me to answer, then write me!
http://www.CarlHampton.com
