The first step to getting control of your financial life and legally eliminating your debt is to assess your current financial situation with a complete balance sheet. How much you can spend is entirely dependent on how much you take in.
First list your fixed expenses. Things like car payments, mortgage payments or rent, insurance, etc. Those bills that do not change from month to month. Then list variables like food, recreation, clothing.
Make sure the list is complete. Even things that may seem irrelevant need to be listed. Once your list is complete, you will have a better picture of what you can spend, and what you can cut from the budget.
Now, list all of your income from all sources. Work, part time work, alimony, child support, settlement payments, everything!
Once you have your total income, multiply that amount by 90%. Thats the amount you can afford to spend every month. Now, prioritize. Make sure your mortgage/rent is covered, food, insurance, utilities, transportation. At the top of the list are those items that you absolutely must have.
If your still not sure, or want more information about budgeting techniques, take a look at the library. There are good software programs out there too. You can start out with just a spreadsheet to list your expenses monthly.
To get a really good grasp on your spending habits, maintain an absolutely accurate list of everything you spend for 3 months. Then reevaluate your budget.
Bankruptcy will destroy your financial future for at least 10 years. Debt consolidation is a trap, replacing one debt with another. Consumer credit counseling companies can charge up to 20% of the total debt as a fee! If your being crushed by the burden of debt, you need to find out what the debt peddlers dont want you to know! Legally eliminate or reduce your debt, and get your life back.
