A Debt Checklist allows you to look at items and areas of your financial life. You need to
examine these to gauge how you stand. Even if you believe you are in good shape take a close
look at these areas to be sure.
- Your Budget. Almost nobody likes this word, which is why so many people
have problems with their finances and debt. You need to know how and where your money is
being spent. In addition, you should be sticking to a spending plan.
Your Savings Account. You should pay yourself each month. To do this
you need have an account in place, in which you keep your funds. At least until you can move
them to an account with a higher rate of return. Visit your bank or credit union to set one up. Your Use Of Credit. You need to review your use of credit to see how,
what, and where you are using it. Using credit to pay your bills or buying groceries is a recipe for
trouble. Your Percentage Of Income For Debt. Nothing makes it harder to stay
with your spending plan than credit card payments. You are paying for your past while trying to
purchase your present. If your percentage of income going toward debt exceeds 15 you could be
headed for trouble. Any amount over 20 percent, you need to put on the brakes. Your Minimum Payments. These add up. If you are to the point where you
ca only make minimum payments on your debts, you will stretch your indebtedness far into the
future. You don't want to extended like this. Find ways to add extra to one payment each
month. Then when you pay one off move the extra payments to another. Your Protection. You need to put into place and maintain protection for
your assets. Your home, autos, life, and health, need be insured. Make certain the protection is
in line with the value of your assets and the needs of the people whose lives would be effected. Your Retirement. Two factors come into play here. You are going to live
longer and life is not getting any cheaper. You should pay into an account for retirement every
month. More is better. If you have been paying attention you'll know not to depend solely on
social security. Your Job Skills. Things change and change rapidly. A constant update
should be part of your plan. You need to be able to obtain better jobs, or sometimes any job. The
more skills you possess the better your chances. Your Money Skills. Since money education is not taught in school you will
need to learn on your own. You need to learn to manage your money, even if you turn it over to
others. Become familiar with how credit and debt works, so it doesn't work against you.
Once you have taken this inventory get to work shoring up the areas where you are weakest. Put
into place the ones you don't have. Then check back every so often to make sure all is well and
as it should be.
(C) 2004 David Wilding.
David Wilding has for the past ten years worked with groups and individuals to help them reach
the goal of being debt free. Visit his web site http://www.debtattack.com for more ideas, tools,
and strategies.