How can I get started in getting control of my finances?
This is a question I hear every week. I have some suggestions for you, but the first is do not become discouraged! Rebuilding your finances may take some time, but it can be done.
Your first step: Credit Cards. Did you know that credit card usage is approaching the level it attained before the 2008 housing collapse? Although “binge” spending is down, millions of folks continue to live beyond their paychecks—spending more than they make every month—while covering the shortage with credit cards.
Not a large amount perhaps, but month in and month out. Deficit financing isn’t just done by the government. But governments can always print or borrow more. When consumers reach their credit limits additional credit is hard to come by. The slightest bump—a cut in hours, an illness, a new baby—can put you in a real jam. What I often see in my office are folks who are surprised, even thunderstruck to learn the extent of their credit card problems.
This stems from the basic fact that credit cards insulate us from where we really stand financially. They permit us to hide from reality. They create a comfort zone that masks unpleasant facts and makes facing our actual finances unpleasant and even frightening. Breaking out of that comfort zone just might allow you to avoid a trip to the bankruptcy lawyer.
Your first action: Today, this evening, take your credit cards out of your wallet and put them in a drawer. For one week carry only cash, checks, and your ATM card. Live only on money you actually have. See how it feels after a week. Studies have shown that folks will often spend as much as 100% more using plastic rather than cash. This is not surprising when we realize debt is the most aggressively marketed product on the planet. Use credit cards, if at all, only for real emergencies.
Getting control of your credit card spending is a huge first step to financial stability. It may take a few weeks to see real change, but try it as you would eat an elephant—one bite at a time.
In weeks to come I’ll be bringing you more tips to help you avoid money problems. I’m hoping you don’t have to call me, but if you do the first consultation is always without charge. I’m Salinas Bankruptcy lawyer Clark Miller. Call me at 424-1764.
