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Do you spend money today based on projected future earnings? Nobody knows the future, so banking on the future is not a good idea. Bad health, divorce, job loss or anything can be in your future. My philosophy is to live everyday as if everything is temporary. If you know a job is temporary or you are in business, you should store away money in case there is a time of famine. When people spend based on their potential future earnings, instead of based on their current reality, they are "banking on their future with credit." Now, if people are banking on their future with real cash that is another story. Unfortunately, most people are using credit to finance their tomorrow. So have you been banking on your future with credit? If so, you can stop the cycle.

When you are in the "eye of the debt storm," it is hard to get clarity or to see possible options regarding your money. Talk to a trusted family member, spouse, friend or a financial expert for guidance and direction. Be real about your current financial situation, but also come up with a plan to reduce your dependence on credit.

Credit Cards
Get rid of credit cards or keep just one for emergencies. But use self-control. If debt is the cause of your pain, close your charge accounts and stop using credit. Why keep the very thing around that may be causing you pain. If you must have a credit card, lower the limit to around $500 to $1,000. That way your spending will not get away from you, and to pay it off is doable. Also, make it a habit of declining new credit cards, credit limit increases, and practice continued discipline.

If you are having financial problems, let your creditors know your situation. Try to work out a payment plan without accumulating new fees and a higher interest. Avoiding creditors and not paying your current debt, will lead to monthly late fees, higher interest rates, and even judgments.  

Set spending guidelines that stay within certain perimeters. Try to keep your debt (not including mortgage) down to less than 15% of your take home pay. For example, if you bring home $4,000 a month your debt should not be more than $600 a month. I'm talking car payment, credit cards, department stores, and student loans. Reduce credit spending and try to pay cash.

Bottom line: stop using credit to finance your future that you believe you deserve. Start living your life by clarifying your needs and wants. Realize your wants are actually a privilege, not a right. Listen, no one knows what the future holds, so stop banking on your future with debt and credit.

Sharman Lawson a columnist on Fabulously40, and a financial coach, speaker, and author of the book 12 Steps to Eliminate Debt Forever! Visit her website: [Link Removed]

Sharmanl, Your links have been removed, please consider upgrading to premium membership.


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