journal entries 71135

Date:  3.5.11

At one time in my life I found myself living outside my means. Financially I had more outgoing than I had incoming, and I needed to find a solution to reduce my debt and become more financially sound. Once I had identified what the issue was, I then had to look at what options I had available to me, especially in the immediate future.  I could sell items, I could take out a loan to consolidate my debt or I could look at my budget and cut back on the services that I was currently paying for.  Selling items would give me the extra money I needed, however there was no guarantee that the items would sell immediately or I would get what I was asking for them.  Taking out a debt consolidation loan would enable me to make one payment for all my debt, however this came with high interest and I would be paying for a longer period of time,   Looking at my budget of what my incoming and outgoing finances were was the only viable solution at that time. Formulating a plan, I looked at what debt I had, how much money I received each week, how much I paid towards my debt.  I looked at what was a necessity to keep my household afloat and what luxuries I could live without, to ensure that I had more money coming into the house, which I could then pay towards the debt I owed.  One I established this information and what I was prepared to give up and how much this would save me, I looked at how long it would take me to reduce my debt to once again live within my means.  I rewrote my budget, including time frames and allowed for unforeseen situations in the form of additional time to pay.  I always kept in mind a final date that I expected to be living within my means again and once a certain debt was paid off I re-evaluated my budget and adjusted it as required.  Sticking to this process I was able to pay off a large part of my debt, this then enabled me to look for long term solutions, and I was able to secure a full time position with better remuneration.  If I find myself slipping back into old habits I go back through the above steps.

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