Money management is the process of budgeting, saving, investing, spending or otherwise determining how to use the cash you receive as income.  It can be a struggle to effectively manage your money when you need to provide for your family, plan for retirement and have money set aside for emergencies.

Money dictates our quality of life, the kind of home we live in, what we can buy and our emotional state.  Sometimes life challenges occur such as divorce or death of a loved one which can require you to immediately change how you manage your money.

Poor money management or unexpected situations can put you into a situation where your cash coming in is just not enough to cover your expenses.

The GOOD NEWS is that there is RELIEF!! This is where you take practical steps to resolve your financial troubles. It is important to ask yourself two questions.

  • How are you going to deal with the challenge to your finances?
    1. You don’t have enough incoming cash to cover your bills
    2. You have no extra money after paying your monthly bills
    3. You have no savings for emergency situations
    4. You don’t know how your children can afford college or you can afford retirement
  • How will you handle the emotional effects on your life?
    1. Denial – it’s too difficult so I will just keep spending
    2. Stress – the weight of the situation is overwhelming
    3. Fear and Panic – afraid to answer phone/open mail, anxiety
    4. Anger – angry at creditors, family and the world
    5. Depression – negative thoughts for extended periods of time can cause a state of hopelessness. If you have these feelings, seek assistance from your primary care physician

How you choose to answer these questions will dictate your financial, family, and personal success.  So it’s time to take the steps necessary for your financial and personal well-being.

The First Step:  Money Management

First, it is important to know how and why your finances are not in order. Understanding the cause of the debt will help you understand how to work with it and hopefully prevent future debt.

Tracking your money is the key to helping you make changes. One way to track your money is to save your receipts for 2 – 4 weeks. If you are a heavy credit card user you can track many of your expenses by reviewing your credit card statements.  Tracking your money does the following:

  • Keeps you aware
  • Helps you stick to a budget
  • Helps identify expenses you can immediately decrease
  • Helps with future planning

Make a list of money you make and a list of money you spend each month. Comparing these two lists will help you determine your spending habits. For those of you who are technologically inclined, there are free online budgeting solutions that will do all of your calculations for you. Some well known online programs can be found at www.mint.com and www.budgetpulse.com.

Are you spending money at restaurants and for vacations or are you spending money on medical expenses? Maybe you have legal expenses for a divorce, or home repair expenses.  Your list will help you identify recurring expenses that you have to pay such as a mortgage, recurring expenses you could consider decreasing such as your mobile phone bills and expenses you might be able to eliminate such as going out to eat regularly.

It is important to understand how and why you spend money so you can move forward in a positive way.   As an example, money affects your emotions.  If spending money is a way to make you feel good then reducing your spending will also require you to find other more cost effective ways to make you feel good.  Not taking action to change your spending habits could cause you to repeat the behaviors that caused your initial debt.

The Second Step: Debt Relief Solutions

 Once you have a detailed list of your income and expenses then you can begin to work on reducing your debt.  If you have expenses that you can easily reduce or eliminate, start there first.  Sometimes that’s all you need to do to get yourself back on track.  Remember, though, that expense management is an on-going process and it can take years to get yourself back to a financially stress-free situation.

If there is no easy way to reduce your debt by managing your expenses then you may need to consider other debt relief options.  Some of these options include:

  • Debt Settlement – negotiation of debt balances, basically reducing the debt you have to pay back
  • Debt Management – reduced interest and monthly payments
  • Debt Consolidation – account settlement using home equity loans
  • Bankruptcy – Chapter 7 cancels all debt

The amount of debt you have to repay and the length of time it will take to pay back your debt will depend on which option you choose.  While it’s true you can handle some of these debt-relief options yourself, you may be better off to use a professional who can usually produce quicker results because of their expertise.

The Third Step:  Avoiding Debt and Saving Money

 Once you have decreased your debt and are living a more financially stress-free life you want to make sure that you can stay that way.  So what are some ways to avoid getting in debt and saving money?

  • Be proactive about managing your employment situation. This means being aware of the factors at work that could result in you losing your job such as a weak economy, change of management, or a focus on reduction of expenses, so you can move out of that situation and into a new job before you lose the one you have.  Keep your skills current, do your very best at your job and always keep your options open for new opportunities.
  • Consider a two year Community College for the first two years. The cost will be much less and you can usually easily transfer credits to other four year colleges to complete a four year degree.
  • Pay cash for larger purchases to avoid too many creditors. Plus, as you save you can earn interest on the money you’re saving.
  • Wait to buy a home to increase your credit score, build stability and save money for the future.
  • Review your monthly expenses annually to see if there is some way to reduce them, particularly for recurring charges like cell phone bills, insurance payments and internet access.
  • Make saving some money each month a requirement just like your bills so that you have some emergency funds if needed.

We Are Here to Help

For information on your debt relief options, the advisors at PCS Debt Relief are available to help you determine what is best for your specific situation. Contact us today at 636-209-4481.

PCS Debt Relief

PCS Debt Relief

Sr. Debt Analyst at PCS Debt Relief
At PCS, our programs are tailored to the client’s specific financial needs. What sets us apart from our competitors is that clients see relief, before any payment is received. Our NO UP-FRONT FEE policy ensures our client’s a 100% satisfaction guarantee. We also do not charge any monthly fees or any cancellation fees. We want the client to feel comfortable during the whole process that’s why we allow them to be part of it every step of the way.
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