Fix Your Credit - part 3

So now you know why you are in the bad credit situation you're in, and that's that you've given away all of your cash flow to other people. So let's discuss how to get some of it back and start digging out of the hole you're in. First, take out all of your credit cards right this second and get a big pair of scissors and go to work. All of them, debit cards included. No cards of any kind whatsoever. Until you get a real firm grip on your finances, plastic is a poison that will kill you over and over again. Get rid of it.

Now that you're on a cash system, you need to figure out the best and fastest way to get back a chunk of cash flow. The easiest way, of course, is to file for bankruptcy. Doing this will let someone else tell you how to do this. You'll lose everything you own but you'll get all of your cash flow back all at once. Which is why you shouldn't do that. You may not be able to keep everything, but you don't have to lose it all either. Besides, if you don't figure out how to do it yourself, you'll just end up right back where you are now ten years later.

So, when we look at our example from above, the biggest chunk of your cash always goes to your house. I know you've grown attached to it in some ways, and you feel like it has some powerful sentimental value or something. Get over it. It's just sticks and bricks and paint. A home is where your family is. And your family will be much better off somewhere a lot cheaper with more money to spend on family things. I know that most people recommend cutting back on entertainment choices, like amusement parks and tell you to just go to public parks instead. But honestly, four hundred bucks here and there is nothing like getting back $750.00 every single month by downsizing the house.

You see, it wasn't always like this. Just fifty years ago houses were teeny tiny by today's standards. My dad grew up in a house that was just under nine hundred square feet. He and his brother always shared a room and they both turned out just fine. As a matter of fact, they both ended up with doctoral degrees. Everyone having their own space is silly. Smaller homes reinforce the sense of togetherness. besides that, most young couples lived at home until they could buy or build one of their own. For thousands of years that's the way it worked. Now, we boot kids out of the house as soon as they turn 18 and expect them to have their own place. Bah, I love my kids, I hope they never leave. Imagine the fun we could all have with all of that cash flow and no debt?

Unfortunately, your parents probably don't want you back. If they do, move right this instant. Pay their bills in exchange for not having a house payment. But at the very minimum you need to turn that $1,950 house payment into something more like $950.00. Most people could very happily live in a house that is worth half as much as their current house. It's going to take a little getting used to, but it will almost instantly cure a big bunch of your credit issues. Instead of trying to work out the small things, whack away at the big one.