Starting With A Clean Slate
Over the last 20 years I have helped many people who were in what I would loosely refer to as a ‘financial pickle’!
They had overdue bills coming out of their ears and were drowning in debt.
There are lots of reasons as to how this happens but rarely is it because of sheer stupidity! There was usually something that went wrong, such as illness, divorce or unemployment and the easiest solution was to put life on credit in the hope that things would get better soon.
The trouble is that when you do this, all too often a cycle of debt emerges. When your income returns you use this month’s income to pay last month’s overdue bills. Meanwhile this month’s bills become overdue and so next month you pay this month’s overdue bills and next month’s bills become overdue!
It never ends!
Starting With a Clean Slate
Instead of going around in circles on the never ending debt wheel, when it comes time to clean up the mess I have come to realise that the best strategy is to ‘start with a clean slate’.
Now I guess you’re wondering how you can do that when you have a truck load of debt.
I simply draw a line in the sand and say “OK, lets do a spending plan starting from today to pay everything ‘on time, every time’ and we’ll put all overdue debts on a repayment plan that we’ll add to the list of expenses.
Note:- I would personally go to great lengths to avoid going into any legal debt agreement if I was in this situation. Instead I would personally contact all the people I owe money to, tell them of my predicament, make my offer to them and then tell them of my two options.
1. They kindly accept the payment plan that I offered which is based on what I can afford after drawing my line in the sand
2. I declare bankruptcy (reminding them that then they may get nothing).
That presents a pretty convincing case for negotiation on the part of those you owe money to!
Third Party Assistance
If you are in this situation and you don’t feel confident approaching the people you owe money to yourself you could go to a ‘debt help’ type business where they have the ability to put you into quasi bankruptcy via a legal ‘part nine’ agreement. In that case all your debtors agree to accept less than you owe them and in manageable installments over a number of years with no further interest.
However, as I already said I would avoid that if at all possible because this solution limits you dramatically for the next 7 years.
Another option is to contact Government Legal Aid for advice and assistance. An internet search will bring up documented advice from these agencies.
Just Do It!
If you do not tackle your debt problem it will just continue to fester away causing you to lose hope and vitality!
Starting with a Clean Slate will give you a new lease on life and gives you a really good chance of putting an end to the depressing debt cycle. You owe it to yourself to take action.
Once you make the decision you will be surprised how things start to fall into place. Like anything in life, getting momentum is the hardest part so just decide to do it and stick to that decision!
More on Why Money Stress Happens
Looking at how someone might find themselves to be behind in their payments and in a stressful financial situation; I already mentioned sickness, divorce and accidents, however there is another reason why and it is not connected to any particular event. It can happen to anyone.
It is because of the absence of a money plan.
When you log into the internet to check your bank balance it takes you all of maybe 30 seconds to be viewing your current financial position, however you may not have realised that there is a number missing! Your online banking tells you where you are right now, but it does not tell you where you should be!
You are left to guess that figure!
Can you imagine what a difference it would make if that number was there? It would be SO much easier to get your finances right if you knew where you needed to be each and every day!
I created the Simply Budgets ‘Spending Planner’ software to solve this very problem. I just could not stand the frustration of not knowing where I was supposed to be any longer. Too many money mistakes were caused by simply not knowing and not having a road map to follow.
How Can I Help You Right Now?
I have written a book called ‘How to Dump Your Debt – without living on Baked Beans’. It is a great resource for anyone who is not happy with their current financial situation, even if you don’t have a truck-load of debt to deal with.
It looks at so much more than just money matters as it takes you on a journey of looking at yourself, your emotions, your strengths and your weaknesses.
Details are available at http://www.simplybudgets.com.au/how-to-dump-your-debt/
My tip for the day:-
Money is so much easier to spend than it is to earn so spend it wisely. Make sure the value you get from spending it truly represents the effort that went into earning it!
That’s all for now,