Many of us have been there to some degree — when we’re swarmed by debt and looming bills that put us on the fast track to financial ruin. It can be stressful, overwhelming, and one of the most difficult life situations to forge through. However, the good news is that you don’t have to get lost in the mire of financial ruin, and it certainly isn’t the end for you! Focus on these five simple steps to take in the aftermath of financial ruin and you’ll be out of the financial red zone in no time.
1. Learn to Accept Your Situation
Acceptance is key, because without it you cannot move forward. You need to look at your situation, assess it, and accept the way things are. This doesn’t mean you need to become depressed and complacent — it just means that your need to understand what has happened and that things must change in order for you to move on and fix your financial situation. Once you’ve accepted it, you will find that getting back on track — and staying on track — is so much easier.
2. Avoid Prepaid Cards
They might seem tempting in a financial quagmire, but prepaid cards are not the way forward. Avoid them at all costs! Prepaid cards are not only loaded with hidden charges but they’re also limited in terms of where they can be used. They’re less secure, and there is no mobile banking system to make checking your balance easier. Everything is slower when you go with a prepaid card, and topping them up is not always as simple as it seems. Instead, consider opening up a simple checking account. You might not know this but there are loads of banks that don’t require a credit score and also have no fees, which means you’ll be able to build back up your finances.
3. Track Your Spending
It’s vital that you’re keeping an eye on your bank account’s comings and goings, as not taking charge of this is a surefire way to end up stuck in a financial hole for years. Tracking your spending also means that you can see where there might be unnecessary payments going out each month, which allows you to cancel whatever you don’t need, or watch your spending habits in the future. It may feel tedious at first, but carefully keeping track of your spending will become a habit that you are guaranteed not to regret forming!
4. Create a Budget
Following the above point — creating a budget means that you have to stick to a strict spending plan every week. Make sure it’s realistic, that it covers all of your needs, and that whatever is leftover should be put aside as savings for getting out of your financial hole. Budgeting should be practiced by everyone, and it solidifies really firm spending habits. Just make sure you stick with it!
5. Small Steps Lead to Success
Getting back on the horse isn’t a race. You can’t rush your escape from financial ruin, because that isn’t how the world works — and that isn’t how good habits stick! Instead, you have to take it slow and steady if you want your finances to get back to the way they were. Pay off what you can, when you can, and don’t deprive yourself of things like food just to get a little further ahead. Always speak to those you are in debt with because that way you can figure out payment plans that actually work for you and your income.
We hope that this article has been able to give you some guidance to help you start putting your finances back in order. This isn’t going to be an easy process, and it certainly won’t happen overnight, but in this case, slow and steady wins the race. Happy budgeting and good luck!
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