World Business Web

If you read the newspaper or watch TV, you can’t help but feel that everyone in the US is in debt up to their ears. With the economy still struggling to recover, we hear of more and more people becoming mired in more and more debt.

I have heard from many people who are just paying the monthly minimum, but keep on using the card. The result is that the debt just keeps growing and growing and every payday a larger part of their salary is being used to service their debt. These people want a path toward financial freedom, a place where they control their finances, instead of their finances controlling them.

The problem so many of these people have is that they want very badly to gain control of their finances, but they lack the motivation to keep on track, to keep taking the steps they need to take to make that dream happen.

For those people I offer in this article, five steps to financial freedom, steps by which you can seize control of your finances. These steps are based upon the model for self motivation. They serve the dual purpose of not only helping you get back on track, but also keeping you motivated to stay on track.

Step 1: The first thing you need to do is to understand why you want to seize control of your finances. The more valuable a goal is, the more likely you are to achieve it. So write down all the positive reasons for 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? Will you be miserable and depressed and disappointed in yourself?

Step 2: Determine exactly what regaining control of your finances means in your situation. Clarity is motivating, so the clearer you are on exactly what you are moving toward, the more likely you are to get there. Here are some issues you need to get clarity on. 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. Every success you have will motivate you even more to achieve another success.

Step 3: 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 Three provides two very important motivational impacts. Clarity, as we saw in Step Two, is motivating. But also, a big goal, like gaining control of your finances, is less scary when it is broken down into its component tasks. The less scary something is, the more confident you will be that you can succeed. Nothing is more motivating than confidence in your competence. That’s why it’s factor number two in the model for self motivation.

Step 4: 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! Power is motivating. Acting intentionally is motivating. Being a helpless victim of the economy is NOT motivating. Take charge and you will stay in charge.

Step 5: 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.

Financially, one of the worst things you can do is to accumulate a large amount of debt. Unfortunately this can happen in a multitude of ways. Sometimes events happen that you cannot control, such as a medical emergency, or maybe you get laid off from work. Sometimes it’s just irresponsible spending on your part. But no mater which one it is, they all contribute to the financial situation you are in.

No matter how it occurred, once financial problems begin, you must take action . If you do nothing and allow your bills to accumulate each month you will only make the situations worst. This usually leads to repossessions, bankruptcy or even foreclosure on your home. You need to take action to get your spending under control and get your existing bills paid down. While this is a good thing, and most methods work, Some work better than others. You need to find the method that works best for you.

Debt consolidation firms are a good source for people who owe a large amount of money to creditors, but are unable to meet the monthly requirements. However, you must have the ability and be willing to pay some of the overdue amount each month. The Debt Consolidation Firm will pay off all your overdue debt and then set up a payment plan for the amount that was paid. Since this new loan can be paid down at a slower rate, it allows you to create a more stable monthly budget.

There really are not negatives to a debt consolidation loan once you have qualified. Late fees and other charges are elemitated as the creditors are paid and the amount owed will decrease as your payments are made. Because you will have no late fees or missed payments, you credit score should start to increase.

There is no way that taking control of an out of control financial situation could be considered bad. This action can only be perceived as a positive and mature economical thinking.

If you researching and compare the best debt consolidation services around, you will be able to find the one that meets your specific financial situation. However, it is advisable to go with a trusted and will known debt counselor before you make any decision, this way you save time through specialized advice coming from a experienced debt advisor. You will also save money by getting better results in a shorter span of time.