Monday, November 7, 2011

Marriage and Debt - How to Deal with It

Okay, you are married and you're both in debt.

You are paying for your mortgage, your car loan, your cable, your phone lines, your electric bill, your water bill, your credit card bills and of course your nanny all at the same time. On top of that you need to buy milk, diapers and vitamins for your baby. And of course who will forget the monthly check-up for the kiddo?

You thought you have enough for the bills. You plan pretty well and thought can survive until one of your loans are settled.

But at one point you splurged. You overspent. That was when everything went shaky. You started delaying your mortgage payment, your cable, your water bill, your credit card bills and sad to say including your nanny's pay. The interest in your credit card bills became overwhelming because you cannot pay even the minimum amount required. It became a ticking time bomb.

With all these bills to pay, how are you both going to cope up?

First thing first. The couple need to sit down and talk about their finances. They have to admit that are broke and the need to re-arrange everything should be on top of their priority list.

It is a very stressful situation for couples to have financial problems. More often than not, this is one o the main reasons why couples separate. So before that happens, they need to do something.

Here are some tips I gathered to help couple straighten their finances.
1. The couple should make a list of their debts first. They can arrange them from the highest to the lowest or from the one with the highest interest to the lowest interest.

2. They should decide what debt to settle first. For me it is best to settle the smallest debt first so that the feeling of successful paying off a debt can be felt which can actually drive them to continue paying off the others. In this method, the list should be arranged from smallest to highest. Then they have to determine how much is the minimum payment for all their debt. Then the smallest debt should be paid a little higher so that it can be finished sooner. After paying off the smallest, they need to go to the next on the list and so on and so forth. After each successful payment, don't forget to celebrate a bit so that you'll really have the feeling of success. (But please DO NOT SPLURGE.)

3. Look at your house. Inspect all your things. Are you accumulating assets or liabilities? Is your house full of junk that just lie on the floor or on your cabinet? Well it's time to let go of all the things that you don't really need. Have a garage sale on your yard. Invite people and neighbors to look at your yard sale and make money out of your trash. You can also learn and sell stuff there. Remember, your trash can be someone else's treasure. The money you'll be making from the yard sale will be used to pay-off one of your credit card bills.

4. Live a simple life. One thing that everybody tends to forget is to live simple. It is just a human nature to want more as your salary grows. But try to learn to curb the want and think with your mind not with your heart. Most of the times, people commit mistakes when they think emotionally. And mind you, emotional thinking tends to make you spend more.

5. Do not mind what other people will say. It's your life not theirs. Why bother what other people will say. Will they help you when you tell them you need money? I think not.

6. Find ways to lessen your expenses. Find a house that suits your budget. Use public transport from time to time. Skip the soda and switch to water. If you can live without a cable connection then do so. If you can maintain connectivity by dropping the broadband connection then do so. Hand wash your clothes once a month and hang them to dry. Plant some vegetables in your backyard. There are actually tons of ways to lessen expenses. It all boils down to what things you value more

7. Don't forget to smile and pray. With a little bit of determination and strong decision making you will eventually climb up the pit of debt. So don't forget to smile and pray. Don't let depression overpower you. Don't let self pity put you down. Every problem has a solution. You just have to hang on.

~Till then

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