Debt Solution: Learning To Live Within Your Means

If you are experiencing hardship in this economy

, you are not living within your means. This could be due to a number of factors. Maybe your means were drastically lowered through a lay off or cut in pay. Perhaps you were a victim of a balloon mortgage payment. Regardless, something happened to change your means. And you will continue to feel the pain of this economy until you make some adjustments.

There is no one debt solution that will automatically alleviate all of your worries. Instead, there are several strategies that, when used together, will provide you with immediate relief. Keep in mind that many of these strategies are drastic. This is not an easy fix.

Before we get into individual strategies, let's take a look at where you should be budget wise. Take out a sheet of paper; jot down your expenses, and compare with the following:

* Your housing costs should not exceed 28% of your net income. Housing costs include your mortgage payment, insurance and taxes. In many cases, these are combined together into one monthly payment. If your income is $2,000 a month, your mortgage or rent payment should be no more than $560. Remember to include insurance and taxes in this equation.

* All of your debt payments including housing, loans, credit cards and auto payments should not exceed 38% of your net income. Using the scenario above, your payments should not exceed $760. A $560 mortgage payment only leaves $200 for the other expenses.

* Total expenses including housing, debt payments and food should not exceed 60% of your income or $1,200 of a $2,000 income.

If you are like most Americans, your numbers do not even come close to matching the ideal. Here are some pointers to help you in each category:

* If your housing costs are too high, you may want to think about refinancing. If refinancing is not an option, you may have to move. Changing neighborhoods can lower your housing costs dramatically without sacrificing space. If you want to stay in the same community, you might have to downgrade to a smaller place or rent an apartment.

* Combine your credit cards into a low-interest loan. This can lower your payment amount dramatically. Sell your car and get a cheaper model to lower or eliminate your auto debt. If you have paid on your car a long time, you might be able to trade down at a dealership and spend less on a new car. Some banks will even allow you to refinance your auto to lower payments.

* Find ways to lower your grocery bill. Use coupons. Purchase generic brands.

There are several things that you can do to live within your means, but first you need to know what your means are. Living within your means is a permanent debt solution. You will have money left over each month if you make some adjustments now.

by: Dan Cavalli

POST COMMENT

Consolidating Debts With a Refinance: Things To Think About Back Pain Relief - 3 Methods For Relieving Back Pain Erase Your Debts Sooner With Basic Credit Card Debt Solutions Sciatica Relief Debt Relief Solutions - Finding The Legitimate Ones That Can Help How A Payday Advance Can Be A Source Of Relief Get Fash Cash For Your Business With Invoice Factoring With No Loans, No Banks And No Debt Amazingly Simple And Effective Pain Relief For Your Dog Quick Migraine Relief Techniques Uk Hides 50 Billion Debt From Partners Tips For Getting Rid Of Credit Card Debt Quickly And Easily How To Achieve Financial Freedom By Avoiding The High Cost of Debt Advice for debt consolidation - Timely Advice for Debt Consolidation is the Key to Financial Freedom