Posted by: Brian | April 22, 2010

Bottom On Up: Getting a Clear Picture

In order for you to start getting out of debt, you need to get a clear picture of where you are now. This will be hard. It will not be a smooth and simple thing to do, but it must be done. Trust me, when you are finished with getting your clear picture you will be relieved (and probably feel like you just fought Joe Lewis for 9 rounds!) I spent almost 3 days trying to get my clear picture but in the end, all it took was a long plane ride.

For starters, you need to ask yourself, “What do you want to accomplish?” If you have no direction, you have no focus and will fail. Now, start jotting down ideas on how to get what you want. I wanted to be out of debt, so will use that as our example. I wrote down things like: save money, pay off loans, research personal finance, etc. You are probably asking how this will help you get a clear picture of your situation. You need focused tasks to achieve your goals and now you have a direction in which to travel. But where do I start from?

This next part is the hard part, so take your time in this endeavor and make sure you write everything down. I am a fan of pencil & paper, but you can use a spreadsheet if you want. Write down on a pad of paper every credit card, auto loan, home equity line of credit, mortgage, student loan, personal debt, and any other account you owe something to someone. Mark the balances on each and add them all up. This is your starting point.

I repeat, this is your starting point. No one else is in the exact same situation that you are. A lot of people might be in a similar situation but not the exact same one, so ignore everyone else. J.D. Roth, author of Get Rich Slowly, wrote about how traditional financial advice might be good for some but each must look at their own situation before using it. Look at the clear picture you just created of your personal finances. Look at what you wrote down as the thing you want to accomplish. Connect A to B

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