The financial crisis has served as a definite wake up call for us. We kept pressing the snooze button and until the wolves came knocking at the door.
My wife and I knew in our heart that things were just not going to get better any time soon and sooner or later we were going to need to change our financial life. There was no longer any room for putting things off like establishing a budget and getting rid of our debt. Don't put off today what you can do tomorrow. Tomorrow never comes and when it does it is actually today. Today is the day you can put yourself on a path of financial freedom.
Now that we have established our emergency fund it is time to really start paying down our credit card debt and to keep our remaining credit lines intact and restore our FICO credit scores. Since we have put the majority of our credit cards on Balance Liquidation Programs (BLP) we no longer have access to our cards to cover emergency expenses. We are now paying cash for things and if we don't have the money for something we have to wait until we do. So we are relying solely on our newly established emergency fund for protection. I had to take out a home equity loan once to pay taxes and that is also a thing of the past as our once pristine credit scores are gone and all of our properties are upside down.
If you haven't started your emergency fund yet and if you are in debt like us, the best way to generate cash is to spend less. It sucks, but no get rich scheme is going to save you. You are going to have to bite the bullet and quit spending. The less you spend, the more money you will have after paying your monthly bills to put towards your credit card debt, building your emergency savings fund, and work on your retirement. If you don't have an emergency fund, chances are you don't have much of a retirement fund either. It's not rocket science; it's just the truth.
If you haven't been able to even start building an emergency savings, make it a personal goal to start spending less.
Here are some tips that helped us:
- Separate your wants from your needs.
- Take the phrase "I deserve it" out of your vocabulary. What you deserve is totally different from what you can afford.
- Call your creditors to negotiate better terms on your car loan and credit cards if you can't keep up with them.
We Also Suggest:
- Bank of America's Balance Liquidation Program (BLP) Still Sucks
- What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
- How did This Economic Crisis Start?
- Should I Use My 401K to Pay Off My Mortgage?
- Should I Take Out a 401K Loan to Pay Off My Credit Cards?
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