Fighting Credit Card Debt

Advertisements promise you the world. Life is so perfect if you just buy into their dream. A perfect example is debt reduction. If you watch late night television you will see promises of magic solutions to credit card debt. Just buy into the amazing program and you will have the secret weapon that only that program can offer you.

It’s cruel. These are companies that hit you when you are down and desperate to find a way out of the phone calls and letters and harassment of debt collectors.

Anyway, you and I both know that most of those slick marketing productions that pitch getting you out of credit card debt through some sophisticated and costly program are a bunch of hot air. However, there is a secret weapon that actually can get you out of credit card debt and keep you there.

The best part is that this secret weapon is not only amazing but it is FREE. It’s not pretty and sexy and fancy. But it is totally reliable.

The secret weapon is a budget.

Did I mention it wasn’t a sexy solution. You know it works. You know why you have credit card debt in the first place. A good solid budget is the foundation of a long term solution to your problem. The advertisers can give you all kinds of fancy analysis and discussion on the cause of credit card debt in your life that will put the blame on everything from the foreign exchange rate to global warming.

That’s a trick to make you feel better about your own responsibility for debt. The catch is that the trick doesn’t solve the problem.

There is just no getting around it, you are in trouble with your credit because you are living beyond your means. You are spending more than you make.

This isn’t to throw a lot of blame and guilt around. There are a lot of situations that can cause you to live above your means. You could lose your job or have an emergency in the family that can cause you financial worries. But when the money going out is the more money than is coming in, you have a problem that will drive up your credit card debt.

To write a budget, you simply sit down and take inventory of those two factors. You inventory how much money you have coming in. Then you inventory how much money you have to pay out. This step alone is a huge step forward toward getting your debt problem under control.

If you are technologically inclined, you can use a computer spreadsheet like Microsoft Excel for budget planning and analysis. You can move things around and let the computer do the math for you.

Don’t make excuses about this. If you don’t know how much a certain kind of spending costs you, dig out your receipts for the last few months and get a feel for it. But once you know your income and your bills, you can tell if there is a gap. Then you can make plans to close that gap either by getting more income or by cutting out some bills or both.

It won’t be easy and it won’t be fun. But if you get on a budget and stay there, you have the basic foundation for a solid family financial plan and you can move forward from there. You may go on to use some other tools to bring your credit card debt under control such as credit card consolidation or balance transfers. But don’t do a thing before you find that secret weapon — the budget — and make it start working for you.