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Thursday, February 16, 2012

You CAN Change Your Hopeless Financial Situation

You CAN Change Your Hopeless Financial Situation

It is very discouraging to feel like you are trapped in a hopeless financial situation that you cannot change. You may feel trapped because you cannot find a new job, or because you are so behind on payments that there is no way to catch up on the. However, it is important to realize you can work on changing your situation, starting today. It may take time to get out of the mess you have created, but it is possible to turn things around.

Start with a Plan
The first step to changing your situation is to start with a plan. This means sitting down and making a list of the payments you are behind on, and all of the debts that you owe. Then you need to look at the income you currently bring in and make a list of your daily expenses. You should cover your basics first. This means you will pay for shelter (rent or mortgage), food and utilities very first, before you worry about anything else. After that you will need to cover the cost of gas, and the other bills that you have. You may need to cut out your entertainment costs such as cable television, gym memberships, eating out, and going to movies until you have caught up on your payments. Take any money you have leftover after you have covered your necessities and apply it to the first payment you are behind on. Do this until you have caught up on all of your payments.

Figure Out What Caused the Problem
Sometimes a bad financial situation happens because of things beyond our control, you get really sick and have a huge medical bill you need to cover or a sudden car repair that sends your finances spiraling off track. Or the issue may be that you do not make enough money to support yourself and your family. If this is the case you need to look at how you can fix the problem, once you have begun to catch up on your bills and deal with your financial issues.

Look for Long-Term Solutions
If a sudden bill put you in a bad financial situation, sticking to a budget and saving up a large emergency fund should prevent this from happening again. However, if you have a bigger problem like not making enough money or compulsive spending you will need to address that larger issue. You may need to change careers and go back to school to increase your earning potential. It may take a few years, and sacrifice to get back on the right track, but it will be worth the effort.

Seek Outside Help
You may need to go to a financial counselor to figure out how to get back on track financially. A credit counseling service will help you figure out a budget, and can negotiate with your creditors to work out a payment plan you can afford. You can also visit a pastor who may be willing to help you work out a budget. There are also classes that teach you how to manage your money effectively. If you have a problem with compulsive spending you should seek help through counseling and a support group. This will help you address the habits and feelings that led you into financial trouble in the first place.

Consider Bankruptcy as a Last Resort
Bankruptcy should only be considered as a last resort to your problems. However, if there really is no way to catch up on the payments, it may be a way for you to make a fresh start. In order to qualify for bankruptcy you will need to have visited a credit counseling service within the last six months and made an effort to pay off your debt. It will damage your credit and make it difficult to borrow money for quite some time, but it can provide relief from your current situation. If you are considering this option, you will need to contact a lawyer.

About the Author:
Bridget Standorford is a freelance writer for several regional magazines in North Carolina as well as a resident blogger for onlinenursingdegrees.org. Her writing experience includes fashion, business, health, agriculture and a wide range of other topics. Bridget has just completed research on<a href="http://www.onlinenursingdegrees.org/">online schools for nursing</a> and <a href="http://www.onlinenursingdegrees.org/levels/associates.htm">nursing associate degree</a>.

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