The end of the year is an exciting time.
After all, you are about to start next year fresh. You have set up resolutions for your family time, health and weight, and now you are considering your finances.
While finances are not as exciting as getting a slimmer waistline, they are essential. Being over your head in debt can be stressful – and set you up for a poor 2018. Therefore, make sure you put extra effort this month toward getting out of debt, setting up a savings plan, and giving yourself the best foot forward.
Tips for Starting Off 2018 Debt-Free from Your Local Kennewick Bankruptcy Team
Even if you are not the type for resolutions, you should consider adopting a resolution theme for this year – and focus it on your debt and overall financial health. Here are some ideas to help you achieve your goals for this year.
Get Your Financial Stuff Organized
You cannot stay on top of the debts and bills you face each month if you do not have a centralized place to store all of them.
Have a place for financial documents, such as your statements, bills, and checkbook.
Make a list of your monthly bills and write them out in order by date. Keep this list somewhere you can easily see it so that you can refer to it and make sure all your bills are paid on time.
Cut Back on Unnecessary Expenses
Any time you research how to get on track financially, you will see that you should cut back on expenses. Which expenses you should cut back on depending on your financial situation. If you are struggling paycheck-to-paycheck, then you are living beyond your means. Therefore, you need to cut every unnecessary expense you can, including:
- Grocery Spending – To feed a family of four a healthy diet, you can expect to pay $146 to $289 per week. The area where you live and the amount of food you consume per week will make this number higher or lower, but staying within this range means that you are not overspending. Realize that the US Department of Agriculture (USDA) numbers go into more detail. For example, a moderate-cost plan, which most consumers are on, would be $239 per week to feed a family of four. If you find yourself still over the moderate, start shopping your local sales, only buy what you need, and consider using coupons to save.
- Cut Cable – Cable is an unnecessary expense for most households. Therefore, when you cannot afford more critical bills you should cut back on cable – this includes subscription services like Netflix and Hulu.
- Carpool – Save on gas and mileage by carpooling to work or school. See if you can set up carpools for your children’s after school activities.
Negotiate Better Interest Rates with Credit Card Companies
Credit card interest rates are brutal when you are struggling to pay them off – especially if you are plagued with higher interest rates. Contact the credit card company and see if they will reduce your interest rate. Most companies will consider an interest rate reduction if you have been a loyal customer for several years or have had good repayment history.
Do Not Overspend for Christmas
It is easy to get carried away with the whimsical feeling of buying gifts and surprising loved ones. However, there is no need to overspend and buy more than you can pay off. Furthermore, if you must dig into your wallet and max out every credit card you have to buy gifts, it might be a sign that you need to focus on your finances better.
Instead of using credit cards or overspending at Christmas time, consider saving throughout the year. It only takes $50 to $100 per month in a savings account to give you a hearty shopping budget at the end of the year.
Pay More than Minimums When You Can, but Always the Minimum
Commit to paying your minimum credit card amount due regardless of any obstacles that may make you consider skipping a payment or two. When you do not pay the minimum, you will receive a late fee, and it will go on your credit report – which can dramatically lower your credit score.
If you have extra money that month, try to pay more than the minimum amount due – even if it is only $20. Also, consider your interest rate when you make a payment. A 20% interest rate will take away a large portion of the payment you make; therefore, you can make up for that by paying $20+ dollars extra towards your principal balance.
Start Building an Emergency Fund
An emergency fund is there to protect you from falling further into debt. While you are paying debts down, always put aside money each paycheck for your emergency fund. Even if you can only set aside $10 per month, that $10 puts you in a better position than $0.
Consider Bankruptcy When the Debts Are Too Much
When you find your finances consumed by debts, and you do not have the money to pay your bills each month or save, it might be time to consider bankruptcy.
Bankruptcy is a financial solution offered to those in severe debt. As a consumer, you might qualify for Chapter 7 or Chapter 13, which will help resolve your current debt situation and get back on track.
Chapter 7 bankruptcy is a dissolution, which means your debts will be erased once your bankruptcy case finalizes. Not all consumers qualify for Chapter 7 bankruptcy; therefore, you will need an attorney to assess your situation.
Chapter 13, on the other hand, restructures your debts and creates a single payment. The court oversees the repayment plan, and once you have met the terms (which take several years), remaining debts are discharged.
Speak with an Attorney about Filing for Bankruptcy
If you need help with your debt situation and you would like to see if you qualify for bankruptcy, contact an attorney from Hames, Anderson, Whitlow & O’Leary. Our attorneys will do a case evaluation to see if you qualify for bankruptcy and which type you might qualify for.
Schedule your no-obligation consultation now at 509-586-7797 or request more information online.