Friday, April 18, 2014

How to Manage Your Debt When You Have Children

December 21, 2012 by  
Filed under Frugal Mom

Piggy Bank

Photo by joannelummy

Children are blessings, but they are also expensive. While there are many benefits to having children two years or less apart, there is no doubt that doing so is expensive. You are looking at double the expenses simultaneously. You’ll first notice the hit when you consider sending your children to daycare together. Then there are double the fees for dance class or sports. Braces at $3,000? Times that by two for your two children who are 1 to 2 years apart. Same with prom, weddings, and the biggie, college.

If you have more than two children close together, you may find your finances in shambles.

Many parents turn to credit cards out of desperation, but then you will likely reach a point where either the credit cards are maxed out or you can no longer afford the monthly payment. If you have reached this point, don’t be hard on yourself. You are not the first parent who has underestimated the cost of having your children close together.

If you are facing this situation, the first thing to do is to face up to your situation. While you may feel desperate and not see a way out of the situation, remember that many people have been in your place before and have gone on to become debt free. It is possible, but it will require work.

Steps to Take to Eliminate Your Debt

1. The first step is to call your credit card companies and negotiate for a lower interest rate. If you don’t feel comfortable doing this, you can work with a debt relief company such as http://www.debt.ca who can negotiate with creditors on your behalf.

2. Take an extra job. Working extra is not something you or your spouse will have to do permanently, but it can help you get out of the hole faster. A year of an extra side income can work wonders with your debt elimination.

3. Lower your expenses. Give up luxuries like cable television. Find ways to buy necessities for less. Consider buying second hand clothes and using coupons for groceries, for example.

4. Sell your stuff. Almost everyone has extra stuff around the house that they don’t use. Sell that stuff on eBay or Craigslist or have a garage sale. This will help kick start your debt repayment plan.

With careful diligence, you can get yourself out of debt and learn new skills that will help you financially with the expenses of two children born close together.

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