Financial concerns can haunt you morning, noon, and night if they have become severe. Part of the problem with fixing your finances is the feeling that the problems will never end. If you can put together a plan, most financial issues can be fixed within a year to the point that they are manageable. The key is to get started.
Decide what constitutes a reasonable fix for your finances.
If you expect to be debt free and rich in 12 months, you are stuck in fantasy land. However, you may be able to make significant progress toward reducing debt and increasing income. Many times, the difference between financial problems and financial stability is only a few hundred dollars per month. This can come from more income, less expenses, or a combination of both. If you are drowning in debt without a job, you may need the help of an attorney more than a financial counselor.
Establish some checkpoints to monitor your progress.
Set yourself some short term deadlines for making headway. Pick a couple of small debts to pay off within a few months. Find things that you can sell over the next couple of weeks to raise some quick cash. Look for a part-time job or a new job that pays more.
Pick realistic dates and force yourself to work hard to reach these goals.
You may not get them all completed by those dates, but this will motivate you to really try hard. Your chances of success are maximized when your ways of escape are minimized. Take a do or die attitude to get this done.
Give your earnings power a long hard look.
Evaluate your current income and income potential. Do you have skills or time that is being under utilized to earn money? Have you been offered opportunities to earn cash but declined them because you believed they did not pay enough? If you have a good job, even a low paying sideline may produce enough income to lift you over the hump financially. Consider that you may only have to do this for a year or so. At that point, you could be in good enough shape on the expense and debt side to ratchet back your workload.
Determine what debts or expenses you can quickly reduce or eliminate.
Line up those debts and expenses and prepare to kick some of them out the door. Cut back on services that you are paying for to free up more cash. You can always add them back later when your financial picture has improved. Look at everything that requires you pay out money each month as a possible enemy to be eliminated. (Do not include family in this line of thinking.) Set up a schedule to begin reducing or getting rid of every expense possible.
Consider seeking help with this work if needed.
If the size of your debt is intimidating, you may need to recruit help. This help can be a knowledgeable friend or a debt management service. If you need to negotiate better interest rates and payment schedules with credit card companies, you may find that some professional help will make a big difference. If you are significantly behind on payments to credit card companies, you may be able to bargain for a settlement.
Plan an exit strategy.
You need to have some idea of how long you will have to stand in this battle. It may be good to have an end scheduled. This will keep you from feeling hopeless and helpless. You will be able to see down the road 9 to 12 months that you can take a breather. It will keep your morale up.
The final end of debt may require another round of plans to take the next big step. A year should be enough to get you some space so that you can relax a little while you put together your next attack on your financial needs.
Prepare to discipline yourself to meet your goals.
A one financial thrust is more of sprint than a marathon, but it can seem long without discipline. Tell yourself to just keep moving forward and looking for ways to make things work better. You may have a time or two when there are setbacks.
Reevaluate your progress every few weeks.
Small gains are still gains. About once per month go through your finances and compare them to last month and to the numbers when you started. A good budget will help keep you from getting off course. Use a spending journal and a budget that spends or saves all of your income to keep you from being tempted to make unnecessary purchases.