How to Manage Your Money When You Don't Have Any!

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How to Manage Your Money When You Don't Have Any!
By Christopher D. West
Let's face it, it's tough to keep track of everything these days and managing your money is certainly not getting any easier. If you're anything like me, you've probably got a good collection of bills and expenses to go with your credit cards and personal loans. That's not to say anything about a mortgage if you've got one!
These things can add up quickly, and sometimes our conditions change to make things more difficult than they were before when we took on these challenges.
The method I like to choose when dealing with these debts is called the "snowball" method. Similar to a snowball rolling down the side of a snowy slope, it gathers momentum the further it goes and towards the end it's an almost unstoppable force. This is the way I like to approach the repayment of debts.
The advantage of using the snowball method (as opposed to the "avalanche" method) is that you get a big psychological boost when you pay off your debts quickly.
Again, this method works best when there are a large number of smaller to medium size debts or financial responsibilities.
Here's how it works. (Keep in mind that a similar approach can be taken towards paying off your bills.)

1. Get a list together of all of the debts you have.
2. Order them by size. (If there are debts of a similar size, place the one with the highest interest rate first)
3. Work out how much you can contribute towards your debts, in total, each month.
4. Work out how much the minimum payment for each debt is each month.
5. Apply the total contribution towards all your minimum payments. (This keeps the credit card companies happy and off your back!)
6. Apply what remains towards the LOWEST debt.
7. Continue focussing on paying off your lowest debt until it's gone.
8. "Snowball" the entire payment from your original lowest debt, into the next lowest debt.
9. Continue "snowballing" your finances for as long as it takes to pay off all your debts.

Here are some other things to consider when taking this approach.
Yes, you will ultimately pay more interest if you tackle the smallest debt, rather than the debt with the highest interest rate first. But, this process has a higher success rate because of the psychological advantage of achievement. Keep this in mind, and persist until you get the mental boost of accomplishment from paying off your first card.
Increase your income, and decrease your expenses. This seems obvious, but it's very hard to save or invest money into anything at all if you don't have some. So, do what you can to get your income up, increase your productivity and get some more work. Look into things like bartering for services, or selling some things on eBay etc. At the same time, get rid of things which are less essential than others like your pay TV subscription or your large mobile phone plan. Resist the temptation to buy new toys.
Take the time to appreciate that achieving the goal of reducing your debt is one of taking responsibility. You are responsible and only you can make it right again.
Getting out of debt can be a challenge but it's not out of reach for most people, IF you have a solid plan and some good old fashioned motivation... and that's where Chris comes in...
Providing practical solutions to achieve synergy and integration within a wide scope of lifestyles, Chris educates his clients through his website: GetOrganised123.com and his testimonials speak for themselves.
Chris is happy to hear from you regarding any challenges you might face, in any area of your life. Always confidential and with the utmost empathy toward your personal situation. I'm here to help so don't hesitate.
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