If recurring bills and credit card payments are occupying too much of your income, now is a good time to come up with a debt management plan to recover that money.
Take these three steps to start improving your financial picture:
Stop wondering where your money goes every month. Itemize your typical monthly expenses to see where it's actually going. Be sure to track all your expenses, including necessities such as housing, groceries and utilities, as well as nonessential items like your daily latte or a new TV.
Don’t forget to estimate for unexpected expenses like auto and home repairs, last-minute weekend excursions and medical bills.
Now that you know where your money is going, you can apply the surplus toward paying off your debt. If your spending outweighs your income, find places to trim your expenses — starting with those nonessential items.
Applying the snowball method is one way to knock out your debts one by one.
The snowball method works like this:
This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, investment. accounting, legal or tax advice.