All it needs is effective money management when you want to manage your finance and outsmart debt. This is not only true for those persons living in debt but also for those who are staying out of it and want to keep it that way. This is applicable for mothers and fathers, single or otherwise, and even for children who want to stay out of debt in the future. Putting it in simple words, effective money management will help all to stay out of debt.
Mothers, who are supposed and considered to be in more debt than fathers, which by itself is highly debatable, can outsmart debt easily and very effectively. Being a mother is a very hard work and being a mother in debt is even harder. It will make everything more difficult and tackling that debt along with juggling other family responsibilities will keep a mother occupied almost all the time.
Managing debt and life seems to be impossible if you do not know where to start and how to continue. You will not know how long it will take to come out of debt and what you would tell your kids about money and money management as they grow up.
However, you are not alone facing such a dilemma. There are plenty of moms out there who have been in this position and an equal number of mothers who are still living in such a situation. However, the journey of each mom towards debt relief is different and unique whether it is getting a personal loan cleared or to sell the family home. However, paying down debt is not as difficult as it is projected by many.
The starting point
Where you start is very important in debt management. At first you will med to know that the point where you start may not be the same as your friend as everyone has a different starting point.
- For some, a small change can make a significant difference. However, it will depend whether you are single or have your husband by your side in your journey to debt relief. If it is so then there is a specific way to deal with your debt. You will have to adjust withholding of both especially if you are not getting any tax refund. This will help you to have an extra hundred dollars to pay off your debt if you are already not living on it.
- You may also make some big changes if possible as that will bring immediate relief in such situations. You will probably want your house to go last but when you are in dire situations then selling off your dream home that is in mortgage will provide you with a lot of money to reduce your overall debt by a significant margin within the first year of your debt relief journey itself. You will not regret moving to a smaller place with your family in the future and will have lots to teach about money and debt management to your children, proudly.
- If you are a stay-at-home mom even you can contribute to the debt relief of your husband and bring your family finance in order. The most significant thing you can do is design a debt payment plan. All you have to do is approach it from a place of intention. If you decide on what you want to spend the money and what are you spending it on you will be better off and will not feel penny-pinching all the time.
All these steps will help you to avoid opting for debt settlement or declare bankruptcy to deal with your debt or that of your husband. Moreover, if you go through the debt settlement reviews you will see that in most of the times it had very little positive effect as far as credit and credibility is concerned.
The lessons learned
The lessons that you can learn and teach to your children through these steps are vast, varied and valuable.
- These lessons of debt management include finding out what motivates you the most and work towards it. You may even give yourself small wins so that you head off burnout. You may start tackling your debt from the smallest balance to largest according to interest rate instead of the other way round. This is because larger debts carrying higher rate of interest will often take longer time to pay off. This has enough scope of putting you in the same position and will make you wonder what you are doing wrong once again.
- You should also find out ways to reassess your debt and financial condition over time. You will often find that situations will allow you to refinance your mortgage or get rid of smaller loans such as private mortgage insurance, or rent, or cars, while most of the times the big stuffs should come first. After that, you may focus on the consistent things that come up every month such as eating out or the cable bill. This will be very helpful for you as these are the areas from where you will get the most results from your efforts.
- Such situations will also help you to realize that there will be unexpected expenses down the road always. You will be well prepared to face and take on these uncontrollable and unavoidable variables the best possible way. However, there will be a few challenges that will still take you by surprise such as your child growing up too fast and you have to look for larger shoes and clothing.
If you are an expectant mom you should focus on making plans for the expenses of then newborn beforehand to stay out of debt. You cannot deny the fact that even babies will have hospital bills down the road and if your baby has his or her own bills tight from being there insurance will count your child as a separate entity having his or her own limits and deductibles. This will help you to avoid being in debt perpetually.