With so many people struggling to make ends meet in our current economic situation, it is more important than ever to take the time to inspect your finances to make sure that your money is being spent where it's needed.
The first step to getting better control of your spending is to track what you're spending now. There are a few ways that you can do this, the simplest being just writing down what you spend money on every day or keeping every receipt that you get every day for a month. This low-tech method takes a bit of time but is quite effective if you can remember to count everything.
There are also some budgeting programs that you can get that you can download your online bank statements to which definitely take some of the work out of the procedure, but work best if you aren't using cash to make purchases; these programs will also cost you money to buy, either monthly or just as an outright purchase.
The next big step is to make a household budget to direct the money where it needs to go; make sure that you allocate your money into the most important areas first, like utilities and rent or mortgage payments. Try to have a little bit of money that's left in reserve so that you have a buffer for in case of emergency.
If, once you make your budget, you see that what you are earning in a month cannot possibly cover all your expenses then you will want to contact a professional for advice on what strategies that you can use to reduce your debt.
One such strategy is debt consolidation which is where you take out one large loan to cover all your smaller debts so that you can make one single payment every month. A consolidation loan can drastically reduce the amount of money you will have to pay out in the long run because it can cut back on your interest payments and it also makes your debt easier to keep track of because it's in one lump.
Your next step if a consolidation loan won't help to solve your problem is that of credit counselling; in this strategy, you pay a lump sum every month to a debt management agency and then they make payments to your creditors. Your creditors may accept a smaller amount overall than what you owe in this type of plan, so that they get some compensation and don't lose out on the debt completely.
Your last resort if none of these options works for you is that of personal bankruptcy; bankruptcy differs from state to state, so it's best to confer with a professional about all the steps that you can take before you have to resort to filing for bankruptcy.
If you and your family are struggling with the stress of drowning in your debts, take the time to talk to a professional who can help you make a plan and get your finances back on track. Being in control of your money again will help you enjoy your day to day life more and remove a great deal of the anxiety of dealing with bill collectors.