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Chapter 7: Cut Them Up
One strategy for reducing charge card debt suggested by financial planners is to freeze your cards in blocks of ice, helping you avoid the enticement of inessential purchases.
Out Of Reach
A long time ago, a financial planner told customers to freeze their charge cards in blocks of ice. When they were enticed to spend, they would be forced to dissolve the ice, giving them time to take a second thought about an impulse purchase.
An even more beneficial answer is to cut up your cards totally so that you can not charge anything else to them. What good does it do to stop up holes in your boat in you are perpetually drilling fresh ones in the side?
Some people may be thinking...But I can not pay my bills without a charge card! That means that I do not get to eat.
This might sound cruel, but I have news for you: you are not paying your bills really. The charge card is simply allowing you to put off the crack of doom and helping to guarantee that when it does come, it will be much worse than you ever thought.
If you are correct, you will almost sure as shooting qualify for free food assistance in your state (if you do not, move to a state where you do - I'm being serious). In a few states, you are able to get up to three hundred or four hundred dollars per month in tax-exempt food money on a debit card. If you do not qualify, then you have a spending issue and you are still making justifications (go back to chapter !)?
If you still state you can not make due: you really are full of it. Once again, my apologies, but it's straight up.
When I was in my younger years, I moved to another state so I could pay one hundred eighty dollars for my half of the monthly rent for an apartment I split with my best friend. At the time, I was bringing in a six-figure investment portfolio income and nearly no debt. My goal was to build up my wealth at that point in my life. Was it pleasurable? Not totally. However I wanted something very few individuals accomplish - complete and total financial independence.
I had a family member who slept on an air mattress for a year and a half so that he could save more than $40,000 by the time he left the Marine Corps at 25 years old. If I can do it, and he can do it, then there is utterly no reason you should not be able do it. Get determined and reach for what you want and keep the credit cards out of reach.
Chapter 8: Other Income
Find a way to bring in some extra money.
I knew someone else who decided she would like to get herself out of debt. She decided that inside one year, she was going to have paid back totally everything in her life, down to the spick-and-span new car she had bought recently.
She went and got a job as a bartender on top of her day job, pitting away every cent after taxes and utilizing it to pay down the outstanding balances on her accounts. She temporarily put all investing on hold, including retirement shares, to accomplish the goal she had determined she would accomplish.
What she has accomplished in short order has been absolutely astonishing. With six months to go, it appears that she is going to easily get to her goal. By bringing in more money into the equation, she was able to blend cost savings from her regular job (she as well did away with her cellular phone, cable, and a lot of other unneeded items) to have double the effect.
Once this self-imposed financial diet is all over, her monthly revenue will go up by as much as several thousand dollars without a single supplementary hour of work. In effect, she gave herself a pay raise. In spite of raising her youngsters and working two jobs, she likewise recently enrolled in college to go back and acquire her degree.
The point of this story is a mighty one. There is absolutely nothing you cannot achieve if you center yourself and are willing to take on the sacrifice necessary to accomplish it. In her case, that's going to mean a year of around-the-clock work to give herself a fresh balance sheet and more beneficial job opportunities. A long time from now, I am willing to bet that she will look back and recognize that this twelve month period was what allowed her to go after her bigger goals and dreams, which include establishing her very own business.
As the old saying goes, till the pain of staying the same surpasses the pain of change, you're unlikely to move. I hope it doesn't take that for you to get empowered and free yourself from financial slavery.
Chapter 9: Bankruptcy
In the domain of personal finance, the "big red button", the atomic option, is taking bankruptcy.
Charge card companies, many of which are possessed by banks, have a lot of priorities. The first, naturally, is to yield profit for the parent company and its shareowners (you might actually be a shareholder through the mutual funds you hold in a 401(k) account without even recognizing it).
When it becomes evident that somebody might be unable to pay his or her balance, there's a priority shift that happens that may work to your advantage. The bank or charge card company becomes concerned with one matter and one matter only: Getting as much of the balance back from you as conceivable and closing or restricting your account. How come? This lets them avoid charging off the amount on their earnings report, which would cause their stock to fall, management to get lower bonuses, and maybe even dividend payments to stockholders to be reduced.
If you declare bankruptcy, it's possible that the entire credit balance will be annihilated because charge card debt is called unsecured in most all cases. That means that it isn't backed up by any specific collateral, just your promise to repay. This would be the worst-case scenario for the charge card company.