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Debt consolidation

Monitoring Spending

Monitoring your spending will help lower your debt and soon allow you to invest.  Many people have no idea where their money goes each week.  If you are serious about improving your financial situation, then you must find the trends that are destructive to your financial well-being.
Debt consolidation
1. Track your spending for the next one or two months.  This may seem obvious but is actually hard to do.  Write down everything, even that soda at the gas station.  Lay out all your bills.  Get a receipt with every purchase.  This is necessary to formulate a game plan that will eventually lower your debt.
Debt consolidation
2. Split all these expenses into two different categories: Needs and Wants.  Needs are fixed costs each month such as grocery, gas money, mortgage or rent, etc.  Calculating your monthly fixed costs will help you budget for future months.  If the Needs in your life take up 50% of your income, you have plenty to spend on Wants. If the Needs in your life take up 90% of your income, then you must be more disciplined in resisting your wants.  Knowing your financial position is essential for heading in a positive financial direction each day.
Debt consolidation
3. With a budget, you can set aside money for paying off high interest debt.  When paying off multiple credit cards, be sure to pay off the highest interest rate card first.  Then after the first one is paid off, attack the new highest one. Just repeat the cycle until you are caught up.  When you are out of debt, use your budget to set aside money to invest, making interest start to work to your advantage.
Debt consolidation
Treat monitoring your spending like a daily part of your life and create a budget to get debt under control.