With the economy in
turmoil more and more people are watching their finances a lot more carefully.
When you are trying to get a mortgage your finances are extremely important. Sometimes though it is the small things that will either make you or break
you., Here are a few things to look for when trying to control your debt:
- The biggest thing that will hurt you is to live beyond
your means. This can cause not only financial stress but also mental and
emotional stress of trying to figure out where to get money to pay for
things that are important. The best
way to resolve this is to only spend what you have. Resolve not to borrow
money or use credit cards. Ask yourself “is this a want or a need?” if it
is a want then you can want it later when you have more money. Make a
commitment to only buying the things that are necessary.
- Credit Cards.. if you are paying less than the
amount due each month than you are only putting yourself in more debt each
month. The interest rates on most credit cards are so high, that not
paying the full amount actually increases the amount you will pay over
time. Resolve this by paying not only the full amount plus an additional
amount. The best solution here is to simply pay off the credit cards and
not use them any longer. But, by diligence and commitment you'll get
there.
- Not really knowing where you are financially will end up
corrupting you. If you don’t know what your financial situation is you will not
be able to set meaningful goals. To find out where you stand financially write
out all your outgoing debts. Put them in front of you so they’re amounts are
see together. Determine a total monthly or yearly debt. Now gather all income
that is coming into the home. Income can be in the form of paychecks, State
Aid, SSI, child support, etc. Next
simply subtract the amount of debt out of the amount of income. Whether the
final number is a positive or a negative will determine if your living within
your means or on borrowed money.
- It is critical that you do not continually add to your debt once
you choose to resolve it. Do not impulse buy.. if you don’t need it don’t buy
it. Cut up all credit cards except one that you will use for emergencies only.
Make a commitment not to buy anything unless it is on sale.
- Spending all your income without saving any only sets you up for a
financial fall down the road. If you have no money saved for a rainy day then
how do you expect to cover for an emergency? If you think you will put it on
the credit card that is not correct. Use of the credit card should only be in
dyer emergency. You should put have at least three months reserves in the bank
to cover all your bills. This way you are covered especially in the event such
as becoming unemployed.
By paying attention to where your money is going and accounting
for every dollar you will be on your way to financial freedom. Once you have your
debt caught up and under control it much easier to keep it that way. Don’t
become over whelmed there is light and you will get there. Give us a call and we can assist you in what options may be available to you when you are ready for a home purchase.