Today’s the day. The day that you wake up, both figuratively and literally, and realized that you are in a bad financial state. All the mail you’ve been getting are not letters from pen pals, but rather credit card statements and final notices. You are maxed out and more than a little afraid to check your online statements.
“How did I even get here?”
That’s a good question to start with, but don’t spend too much time right now pondering it. What you need is not a bottle of Jack and some tissues. What you need is a solid strategy for getting you out of this financial rut and into financial fitness. Picture yourself as a contender on Biggest Loser, but instead of shedding weight, you are shedding debt.
Similarly to the program contenders, you need to turn your lifestyle completely upside down and inside out by implementing drastic changes, new techniques, and committing yourself wholly to your financial health. You might want to seek out the help of a financial advisor or coach, but if you are more of a DIY person, start by doing the following:
-Evaluate your means
Take a good look at exactly how much income you make, post deductions for tax, employment insurance, RRSPs, etc. Then deduct your essentials like union fees, mandatory industry association memberships, and the likes. Now you have more of an idea of what you actually have to work with.
-Look at your spending
How much are you spending on rent, on food, on entertainment, tech, clothes, etc.? The answer to quick savings might jump out at you right away, like an expensive gym membership you rarely use, a mobile plan that you don’t fully utilize, expensive concert tickets that were way over budget. Other savings may not be as apparent. Start with a list of realistic necessities, like housing, food, transportation, and remove them from the rest of your expenses. Now get rid of as many things as possible from the remainder of your list OR look for a much cheaper alternative. Once you are done there, go back to your “necessities” and see where you can trim some fat. Consider downsizing your home, trading in your car for a transit pass, or shopping sales for food items.
-Make more money
We all wish it was as easy as just saying it, but by increasing your means you can tackle your existing debt and then work towards creating a savings fund that you can use for emergencies or special expenses. A few ideas for making more money is selling off some of your “junk” that you don’t use on classifieds like Craigslist or eBay. This is one way to clear your space as well as make some extra cash. If your current job isn’t providing you with the salary that you want, it might be worth considering a career change. Whether that means switching places of employment or completely looking into something new, it depends on you and your industry. If you are having trouble picturing financing more education or training at the moment due to your financial state, you can look for a private lender that provides installment loans for people with poor credit in order to afford tuition or registration fees.
-Join a group
The Biggest Loser’s success lies not only in working with qualified professionals. It’s about the element of competition but also support that the group provides. Find a financial support group that will help you in building your financial fitness as well as push you to be better than even you thought you could be.