Recently, a reader who found himself in a situation much like my own financial meltdown. He read about the real pain of the meltdown and the general plan I began to follow afterwards, but there’s a little gap in the middle that wasn’t really explained. How did I get out of that immediate jam? What did I do to get out of that situation where I had a pile of late bills and not a dime to my name?
Well, here are the five things I did immediately to fix the situation.
I called every credit card company and asked what I could do. I just flipped over my credit card, dialed the number, eventually got to a real person, and basically said that I wanted an interest rate reduction. Almost every time, I got a rate reduction of some sort. Right there, I trimmed off a few hundred a month in payments.
I liquidated everything I could get my hands on. In two days, I sold several hundred DVDs, four game consoles, approximately 50 video games, an extensive vintage baseball card collection, a Magic: the Gathering card collection, most of my hardback books and trade paperbacks, and several other odds and ends. Basically, I went through my belongings and asked myself honestly, “Compared to my son, do I really need this?” The answer was usually no. This cash was enough to pay off my immediate bills, pay off a portion of the largest credit card debt.
I started a second job. That’s not entirely accurate; I actually just did a big push for my computer consulting company, which I had let become somewhat dormant for a while. I called every person that I had done business with, I put up new posters about the business. This resulted in a big wad of extra income right when I needed it.
I started questioning everything that involved money. If I spent money for any reason, I spent some time thinking about why I was spending it, and most of the time I talked myself out of spending it. If money left my possession for any reason, I asked why and if I didn’t get a strong answer, I didn’t spend, period. Prior to that, I would just spend and not really think about it at all.
I started reading. I went to the library and checked out a big pile of personal finance books that very evening. I read them all in about three days, then went back for another pile, then another. I just washed myself in information, trying to understand what exactly I needed to do to get a grip on my situation. After about a week of it, I started to get a grip on what I needed to be doing.
This is what the first few days after my financial armageddon looked like, and from there I moved on to a financially stable lifestyle which is more wonderful than I ever thought possible.