It sounds so simple! Take just 5 steps out of the cash advance line and into being financially free. The definition of financial freedom may be confusing, but it certainly would consist of very little bad debt. In order for anyone to have a credit score, there needs to be a history of managing debt well. You have to have debt in order to have credit, it’s quite the oxymoron. Money management skills are not a requirement to apply for the loans or credit. For those of us who could have used a few pointers along the way, read these next 5 steps. Before you can do anything to help your situation, you will need to take a hard look at your financial situation.
Use the cash advance application as a wake-up call.
Minimum payments made every month makes credit card debt very convenient to all types of income levels. When a person no longer has additional credit as an option, they tend to move to the cash advance line. Unfortunately, this only ends up making a bad situation much worse. These loans carry two week term limits and the interest adds up fast. If you are at a point where this type of direct lender is your only access to fast cash then it is time to find out why.
Clear off the kitchen table and spread out all of your bills. Arrange them into piles according to what type of expense they are. Then you can organize each pile from top to bottom in reference to their importance. Mortgage and utilities would be on top of the cable and cell phone bill.
Step 1 – Get a handle on where your money is going. How much does it really cost to live in the home and how much of it can be reallocated? How much is your total credit card debt. How much of the monthly payment goes to interest or fees? Add these figures up to see a total of your monthly wasted income on making credit businesses richer. Now you have a goal; claim that money back as your own.
Step 2 – Pay off your high interest debt first. Take the credit card and/or cash advance debt and organize it by interest rates from highest to competitive. This is the order to pay off your debt to start saving money in the fastest way possible.
Step 3 – Pay attention to emergency needs. As you pay off your debt, life does not stop. You will still have periods where extra money is needed. You can’t pay down debt while you build it somewhere else unless you are really careful and know all that is involved in the process. Watch interest rates, refrain from pulling money out early from retirement funds and do what you can to not put your assets at risk.
Step 4 – Expect problems – Keep putting money aside whether by cutting back, cutting out or juggling other expenses. An emergency fund will come in handy for a broken furnace, a dead washing machine or car repair. You don’t want to end up in the cash advance line again do you?
Step 5 – Don’t stop – Keep saving, keep paying down bills and keep paying attention to the bills on the kitchen table. Just because you pay one creditor off, don’t slack on the rest. Instead, push even harder and faster to rid your finances of all the bad debt.
Simple right? I know it is not, but it definitely is doable. A cash advance gets a bad name; but if anything, it could be a person’s saving grace. Use it sparingly to boost finances back. Complete the objective: live comfortably on your own income.
