Looking back at 2019 is important for many reasons. How did your year go? Did you achieve your resolutions? What is your financial situation going into 2020? It is important to be aware of what your financial future looks like. The economy is very shaky right now because of the impeachment and upcoming election. People are not sure what to do with investments and how to move forward with handling their part in the economy.
It is always very important to be sure of your financial footing, but with the economy where it is at the moment it has become even more important to be aware of what is in the works for you financially this year. Do you invest? Do you save? Do you get out of debt? So what do you need to look at to decide how to move forward for 2020? Here are some simple steps to help you evaluate your financial situation:
Look at how much debt you have:
It’s never fun to really look at how much you owe in bills and come to terms with how much debt you really have, but it is necessary if you want to go into the new year with a plan and an idea of how much you owe and how much you will be paying off.
Look at what you paying out each month:
Keeping to a budget is the most important part of saving and paying off debt, as well as staying out of debt. Make a spreadsheet to see how much you have coming in and going out each month. This will give you a better idea of how much income you have, so you know what you are paying as well as how much you can save.
Look at how much you are you saving out of each paycheck:
Once you are organized and knowledgeable of how much you are bringing in and paying out each month, you can decide how much you have left to set aside for savings and paying down debt. Mapping out your expenses will make everything easier.
Decide on your budget and evaluate if you sticking to it:
Now that you know what you want to save and how much is coming in, as well as what is going out every month, you have the shell of what you need for your budget. Finalize how much you need for living expenses as well as how much you will be saving. Once you have your budget set up, remember how important it is to stick to it! This is your road map to get out of debt in the new year!!
Research your options for consolidation:
An option to consider is looking into debt consolidation if you don’t want to make a million minimum payments and/or you have high interest rates on your current debt. There are a few options you can choose from when it comes to debt consolidation.
Refinance: If you own your home and you have built up equity by making on time payments on your mortgage for more than a year, this may be a good option for you. You can take equity from your home and pay off any bills you have. This will often be a chance to lower the interest rate you are paying on that debt and it will help you have only one payment to keep up with every month. Make sure you consider how much the payment will be each month, and make sure you can pay it and stay on your new budget. Also consider there will be closing costs and it will change the interest rate you are paying on your mortgage. The closing costs can very often be rolled into the equity, so you won’t have to come out of pocket for it, but make sure it is the right option for you before you jump into it.
Balance Transfers: If you have relatively good credit, but you have bills you can’t pay in full each month balance transfers are an option to consider. When credit card companies see that you have revolving debt and high interest rates, they will often send you offers’ for balance transfers. These promotional periods of time, allow you to have little to no interest while you pay off your debt. There is a small transfer fee, but it’s not much compared to the high interest rates you would be paying by keeping your debt revolving on your normal credit lines. Also make sure you pay off the transfer amount before the promotional period it up because the interest rate will go up when the promotional period is over.
Personal Loan: In the current economy, personal loan through websites have become very popular because it is easier to get a loan through these programs than it is to get a loan through an old school bank. Please just be aware that depending on your credit score and history, you may run into high interest rates with these loans, so make sure it is worth it before getting into it!
Decide if consolidation is the right option for you:
Now that you have some options for consolidation, you have to decide if it’s the right option for you and how you would want to go about it if you do. Make sure to compare your options and go with the best choice to help you get yourself into a better place financially.
Look at your options for debt you have in collections and decide on the best way to solve this problem:
Ok, so you have your new budget set and you know what you want to do as far as starting to get your finances under control, but consolidation isn’t an option for you and you have debt that is in collections. What do you do now? It can feel like a hopeless situation to be constantly hounded by calls from debt collectors and to know that you have interest mounting as well as watching your credit score plummet, but you can get out of this and it can be affordable!
The best option for debt in collections is Debt Settlement. You can call the debt collectors and negotiate an affordable amount to pay. They will want you to pay on the spot and try to pressure you to pay in one payment, but you can set up a payment plan for the settlement amount that makes the payoff affordable for you. If you don’t feel comfortable doing the negotiating yourself, you can call a debt settlement agency to do the negotiations for you. Be aware that you should only work with an agency that does not tell you to stop paying your other bills. This option is only best when you have debt in collections.