- Do you lie awake nights thinking about how you’re going to pay your bills?
- Do you avoid telling your spouse or significant other that you’re in financial trouble?
- Is your paycheck gone before it even hits your bank account?
- Are you borrowing money from your parents to pay your bills?
- Using paycheck advance services?
Yes, there’s a problem with your finances, but you need to look at your bills another way – a healthier way.
Look, you still have your job. You got yourself into this situation, so there’s a way out. If a catastrophic health emergency or a lay-off brought you to this place, it’s completely understandable. If you bought too many goodies or spent your money on sales, gambling or vacations, you need to stop and take a serious look at your life.
In order to be a Woman of Means you have to realize that the goal you set for yourself takes priority over sales, vacations, and silly spending that feels good in the moment but ultimately will bankrupt you.
You also have to understand that your credit score has probably taken a dump if you have missed payments or made payments late and only paid the minimum amount on your credit cards.
All of this being said, it’s not the end of the world. You can climb out of this hole and be the Woman of Means you’ve always wanted to be. Simple, baby steps will do it.
Some financial gurus advocate paying off the credit cards with the highest debt first because they are piling on more charges in interest. We believe that from a psychological perspective it’s better to get rid of the smallest debt first and then use the money you’re saving from that payoff to get rid of the next smallest debt in line, working your way up to those behemoth credit card debts.
The object of paying off your credit cards is many-fold. First, you don’t have the bill! When you go to apply for credit on a car or a home, your debt to income ratio is a factor and many lenders will suggest you pay off all your debt. Second, sleep well at night. The stress of how you’re going to manage these bills is gone. Third, make sure you use your credit cards, but pay them off in full every month. Soon your credit card company will increase your limits and you’ll be on your way to becoming a financial powerhouse. GOAL!
Don’t worry if your credit rating takes a hit. It happens for whatever reason. You won’t die from it, and by making smart financial decisions, you can rebuild it over time. But remember: A sale at Macy’s or Nordstrom’s is not a financial emergency. Use them wisely!