Tuesday, January 29, 2013

Can New Year's Resolutions Lead You To Bankruptcy?

New Year's Resolutions

by Eugene S. Melchionne, Connecticut Bankruptcy Lawyer

It?s now near?the end of January. ?Have you broken any of your New Year?s Resolutions yet? ?Besides resolving to lose weight, exercising more, or eating right, managing money is one of the most common resolutions for the new year. ?Yet many fail. ?But oyu don;t have to and it is never too late. ?Here are some secrets to success.

1. ?What are you worth?

  • Know where you are first. ? Before?promising?to do anything, figure out where you stand now. ?You can make changes if you don?t know what to change. ?So let?s start with a list. ?Write down everything you own, now go back and put values on everything. ?Not the value of what you paid for the items, but?rather?what you could get for them if you?had a tag sale. ?Then repeat the same for your debts. ?Not you money expenses, but real money that you owe. ?Write down the balances on those debts. ?You know how to do the math. ?Total it all up.
  • Know where you came from. ? To make sure you understand the trends, go back and repeat the exercise as if it was five years ago and again as if it was ten years ago. ?See any trends?

2. What is your net?

  • The next step to figure out what you earn. ?What is the total amount coming in the door every month from all sources of?income. ?If your pay is not?regular, figures out what you make in a season or a year and divide by 12 to get an average.If you get paid every week, multiply by 4.33; if you get paid every other week, multiply by 26 and divide by 12. ?Do it for both your gross income and then for your net take-home pay.
  • Now figure out your regular monthly expenses. ?What is the light bill, the food, the mortgage or rent, the car payment, and so on. ?Keep inmind that like income, not all expenses occur every month. ?In that case, add up the average year?s expense and divide by 12.
  • Yup, you know what to do next. ?Do the math. ?Add it all up and subtract the expenses from the income. ?Is it a negative number?

3. ?Now do some dreaming.

  • For the moment, forget about today. ?Think about where you want to be five years from now. ?For the first time maybe in a long time (or maybe ever), think about what YOU want. ?nOt what you think you must do or have to do or what others want you to do. ?Where do you want to live? ?What do you want to be doing? ?What your wishes and desires? ?Got that vision in your head? ?Good.
  • Now come back to earth. ?Now, let?s look at what is going to happen over the next five years. ?What is already scheduled in your life that will likely happen in the next five years? ?Are you graduating from school or child graduating or entering school? ?Are you getting married or expecting a child? ?Retiring? ?What are the bumps in?the road coming down the pike?

4. ?Keeping the dream alive.

  • Now comes the hard part. ?How do you get from where you know where you are now to where you want to be? ?Before you get too depressed, some things to consider.
  • It?s never too late. ?It sounds crazy, but it is true: ?Tomorrow IS the FIRST day of the REST of your life.
  • Don?t afraid to jettison stuff. ?After all, some stuff is just stuff. ?If that car payment or mortgage is killing your budget and you can get a substitute, jettison?the car or house. ?It is not who you are. ?YOU are who YOU are and no one else is.
  • Cut your expenses so that they are less than you make. ?And then pay off what you can as quickly as you can without making new bills.

Don?t assume you know the answer. ?Sometimes, the best advice is to get advice from an outsider. ?This is someone who sees your life objectively without the baggage of your emotions. ?As a team, you can make a plan to manage your debt. ?And if that debt cannot be managed and it exceeds your assets and it exceeds your income and there seems to be no way to get to your dream, then bankruptcy is designed to let you?have a ?do over? and get a new start. ?And after all, that is what New Year?s is all about. ?The start of a new year and a new life.

Source: http://www.bankruptcylawnetwork.com/can-new-years-resolutions-lead-you-to-bankruptcy/

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