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Take these 6 steps to become more financially stable

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Get back on your feet financially with these tips for financial stability.

Do you have to juggle which bills you can afford to pay each month? Debt collectors may be leaving daily messages or calling you at work. Or maybe you never have enough left over from your paycheck to put aside savings emergencies or retirement.

If this sounds like your current situation – or perhaps even for most of your adult life – you don’t have to accept a lifetime of debt and financial stress.

Many people with money problems get out of debt on their own, improve their credit, and learn how to manage their money better to avoid debt and save money.

Time is on your side

Did you know that negative credit accounts are automatically removed from your credit report after seven years? Even bankruptcy is dismissed after seven to ten years, depending on the type of application.

Meanwhile, you can now find ways to become more financially stable and pay your bills on time so that your credit improves steadily, and then improves significantly once those old, nasty bills are gone from your credit report.

Seven years may seem like a long time. But this time will pass, whether you spend it living with the stress of financial hardship or gradually improving your money management skills to become more financially stable.

6 steps to becoming more financially stable

1. Review your credit report

Before you can plan to improve your financial stability, you need to know where your credit stands. Order a free copy of your credit report at AnnualCreditReport.com. Once you have a copy, review the report looking for accounts with negative payment history so you know when each one will be excluded from the report.

Also check for any inaccurate information that could hurt your credit score and contact the lender and credit bureau to dispute the information and have it removed.

Find out: How to read your credit report step by step like a pro

2. Meet with a credit counselor

Whether you’re deep in debt or facing financial trouble, meeting with a nonprofit credit counselor can help you become more financially stable.

A credit counselor can help you create a budget and plan to pay off your debt. A counselor can also tell you what is holding you back on your credit report and how to improve your credit report.

Find out: Everything you need to know about credit counseling

3. Stick to a budget

Create a monthly budget with the help of a credit counselor or a friend or family member who is good with money. You can also create it using a budgeting app, for example Mint yard or You need a budget (YNAB). Once you’ve laid it all out, you’ll see where you can cut costs and where you’re constantly overspending.

To control your credit card spending, try to set aside cash for things like groceries, toiletries, your daily coffee, and other expenses. That way, you won’t be tempted to overspend and run up the credit card balance you’re trying to pay off.

Then commit to sticking to your budget each month, adjusting it if necessary as you assess your finances each month.

Find out: How to make a budget and stick to it

4. Accumulate savings

If you don’t have a savings account, save up $100, or even $25 if the bank allows, and open an account. Then add to it consistently, even if you can only afford a small amount at first. To make saving as painless as possible, ask your employer to deduct an amount from each paycheck and deposit it directly into your savings account.

Set a low goal for your first savings, maybe $500 or $1,000. Then add to it with each paycheck. You’ll soon have enough to cover small emergencies so you don’t have to borrow money from your credit card. Eventually, you’ll save enough to cover big emergency expenses as well.

Find out: 6 painless ways to save

5. Educate yourself

Make it a daily habit to search the Internet for articles on budgeting, debt repayment, or personal finance management. You will be amazed at the great tips that can help you manage your finances to become more financially stable.

Find out: 7 ways to improve your financial literacy

6. Set financial goals

When you’re struggling to make ends meet, financial goals can seem like a distant dream. But once you become more financially stable, this obstacle will no longer be there.

You’ll believe in yourself and your money management skills enough to set big goals like buying a house, having kids, traveling, and other ways to make your life happier and more fulfilling.

Find out: How to strengthen 5 vague financial goals

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