Starting here, we give you the information you need to take control of your
finances and pay off debt.

Lets start from the basics.

1. You need to know exactly what the current state of your finances.
To find out the way to deal with your debts. Heres how you
can begin to take stock of your finances:

- Compare your monthly spending to your monthly income.
You'll be shocked - most people dont know the
amount they actually spending relatively to what they earning. By
doing this comparison, you may quickly understand that you are
using credit to a life style you can not afford, and you are
spending your way to the poor house. If thats the case, you
must reduce your spending to meet your financial obligations,
and you may need to do a lot more than that depending on
the seriousness of your financial situation.
- Order: Equifax, Experian, and
TransUnion copies of your credit history.
Your credit history is a detailed portrait of how you
spending your money: to whom you owe money and how much
you owe, whether you pay out your debts on time, whether you
over your limits, and so on.If banks charging higher
rates on credit card and your loan, it is a direct consequence
of having a lot of bad info in credit history.
- Get FICO - FICO score is derived
from your credit history information, and its other measurement tool of
your financial state. Nowdays, a lot of creditors deciding
about you based on this FICO more than on the real
information in credit history.

By the way, if you are student -
Here is another reason to pay off debt quicky. The folks who process your FAFSA (Free Application for
Federal Student Aid; ) are concerned
with how much you have in income and assets,
not how much you owe, which means you dont even get
any credit for your debts. So to minimize the value of
assets you show on your aid application, you need to pay your debts.

We understand that things beyond your control like bad luck
and rising prices may be partly to blame for your debt. We also
know that probabilities are youre at least partialy responsible too.
For example, you may pay too little attention to your finances. You didn't pay your
bill on time; you not paying attention to the balance in your
accounts so you ofthen bounce checks; or you have
a bunch of credit accounts.
- Keep balance high on your credit cards. As a consequence,
you will be able to pay the minimum due on the card, you
paying a big amounts in interest on your credit card debts, and all this debtl reducing your FICO score.
- Have little (or nothing) in savings so you have to use credit to
pay for every unexpected expense.

Using a Budget to Get out of Debt
After you assess the seriousness of your financial situation, you
need to prepare a plan for managing your debt, including keeping
up with credit payment and at least making
payments to your most important creditor. One of the first step
you have to do is prepare a household budget (or money plan,
as some financial experts saying). And if
your income is $25,000 or $120,000, living with budget in mind
is probably the most important thing you can do to get out
of debt and forget about debt problems in the future.
A budget is basicaly a plan for how you going to
spend your money during the month. It helps you to:
- Let your dollars go toward paying your
debts and expenses first.
- Will let you to control you spendings
- Pay off your debts as fast as possible.
- You will be able to save some coin.

So first thing to do:

A net worth statement is simply a listing of all you own
and all you owe; the difference between the two is
your net worth. Your net worth is like a financial report
card. Knowing your net worth gives you a good idea of
your financial situation.
To figure out your net worth, fill out the following worksheet.
This information becomes a benchmark you can
use to measure your current financial status relative to
others and to where you want to be, from year to year.

To be continued...