Self Help Debt Settlement - Steps to Help You Negotiate Your Own Debt (Part 4)

The debt settlement process begins!

How do I allocate my money?

How do you determine how to allocate your funds properly to the right sources on a month to month basis? Some expenses are monthly and others are yearly. These expenses will need to be calculated on how to save for on a monthly basis.

Living Expenses:

Living Expenses that are required on a monthly basis need to fit into your budget first. First, include your food expenses. Use your supermarket flyers, so that you can maximize your food budget. Secondly, include power and water. These can be somewhat fixed expenses, so it's a good idea to have them debited directly from your account. Fixed Monthly Expenses can also include your phone, internet, and television costs. Make sure each expense is on a package, so that the expense can be budgeted for as a fixed monthly expenditure. Other budget costs that need to be accounted for are gas costs, and any fixed medical costs. This will also include your rent or mortgage.

Living Expenses not due every month:

It's a very easy formula. Every expense that is paid on a yearly basis needs to be divided by twelve and put away to prepare. There are a few ways to do this; many companies will allow you to pay them monthly. You can also put the money away in a high-interest savings account, so that you will have enough funds when the time comes to pay. Expenses that are included in this are car insurance, property taxes, Christmas (a time not to over spend), some car expenses, and vacations (try a staycation instead).

Dealing with Your Debt:

After, you have allocated all your money to your appropriate living expenses. You will need to attack your debt. It is likely, that you are in a position that your debt has overwhelmed you and you cannot pay everything that is owed. In the future, you will want to make sure to keep your debt payments at no more than 30% of your monthly income. If you find that you can't make your debt payments, you will need to take the following steps.

How to I determine how much you can pay your creditors

Gather all of your monthly bills together and establish a monthly budget. Make a list of your necessary monthly expenses to include your mortgage or rent, car payments, utilities, Insurance, gasoline, food and other household bills. Take this amount and multiply that sum by 1.2; this will give you an additional 20 percent cushion for unexpected expenses or emergencies. The difference between your total household income and the previously calculated amount is your monthly settlement budget. Start setting this amount aside as your settlement fund, as this fund accumulates use this as your benchmark for amounts you offer your creditors.

Ian Stanton
Director of Marketing
B-EZ Enterprises
(480) 278-3717
email media@2settlemydebt.com
website http://www.2settlemydebt.com