Five steps to regaining control of your finances

Too many people are becoming mired in more and more debt. Many of them are starting to see how their life’s blood is being sucked away, and want to be shown a path toward financial freedom, a place where they control their finances, instead of their finances controlling them.

In today’s posting I will give five steps to financial freedom, steps by which you can seize back control of your finances. In my next posting I will explain the science behind the five steps, showing how they fit into the model for self motivation.

Step One: Write down why you want to regain control of your finances. What will you gain? reduced stress? the ability to buy things you need? a feeling of pride at how responsible you are? Also write down what will happen if you fail to make this change. Will you have to file bankruptcy? Will you lose your house?

Step Two: Determine exactly what regaining control of your finances means in your situation. How will you know when you have regained control of your finances. Does it mean reducing your debt? Does it mean living below your means so you can be paying off your debt? Write down what will be occurring in your life when you have succeeded.

Step Three: Write down a clear description of how you are going to make this change happen. Make a plan. Write down all the steps you can think of that will help you make this change. Will you cut up your credit cards? Will you track your spending for a certain period of time? How long? Will you make a budget? Will you set aside a set percent of each pay check to use toward your debt? Will you need to take an additional, part time job for a while to catch up on your debt? Will you contact your creditors to try to work out a payment plan?

Step Four: Be in charge. Suze Orman says in The 9 Steps to Financial Freedom, “True financial freedom is not only having money, but having power over that money as well.” Make a conscious decision that you control your financial life. You are the boss!

And last, but by no means least:

Step Five: Find resources that will help you make this change. The worse the economy gets, it seems, the more resources there are for those who need help getting back on their feet. Here are three:

1. Credit counseling is a big resource, but make sure you do your research. Check out the Federal Trade Commission’s website for what you need to know before you retain a credit counseling company: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm

2. The federal government can be of assistance. Go to usa.gov and type into the search screen “debt relief” for information and direct assistance.

3. If you are facing foreclosure, contact your state’s bar association for the names of attorneys who have volunteered to assist people with your problem.

Getting control of your finances will be a struggle, but by applying these five steps, and working hard, it’s a struggle you can win.