Become a Financial Superstar

By Debbie Wilson
LoanPage.com Columnist

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So you've got a few money issues. Who doesn't? But unless you want to retire broke, you'd better start paying attention to what you spend today. Debt consolidation techniques don't have to be complicated. You simply have to know how to work them.

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Drowning in Debt

If you're like most Americans, you've grown up believing that you can't live without a credit card. But that belief has led the average household to incur more than $8,000 in revolving debt. The first step toward weaning yourself from borrowed money is to cut up your cards--keeping the accounts open is generally better for improving your credit rating, but you have to stop using them. The point here is to begin to live within your financial means. Try switching to a debit card instead. You can do all the same things as you can with a credit card -- except get into more debt. Next, consider all your options for managing and paying down your debt. This might entail selling items, getting a second job for a while, debt consolidation financing, consumer credit counseling, and doing without certain luxuries. Finally, develop a budget and track your expenses. Credit counselors can help you with this if you need guidance.

Financial Control

Debt consolidation begins by cataloging your monthly household expenses--mortgage, utilities, auto payments, credit card payments, tuition, child care, food, etc. Don't forget to include quarterly or yearly expenses such as property taxes, homeowner's insurance, gifts, and repair and maintenance fees. Next, obtain your after-tax monthly income figure and compare this to your total monthly expenses. If you're spending more than you earn, now is the time to take financial control.

Ultimately, successful debt consolidation will rely heavily upon your ability to take responsibility for your financial situation. Forget trying to reduce your debt overnight. And forget wishing debt consolidation was easier. It will take time and effort, but before you know it, you can fix your money problems and become a financial superstar!

About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a B.A. in Business Management with a minor in Physical Education.

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