Nobody's perfect - especially when it comes to managing your money. While you may try to keep track of your funds, budget wisely and spend well now, you may have made some serious money mistakes when you were younger. Since having money doesn't exactly come with an owner's manual, you may have had lackadaisical spending ways or went wild with credit before you smartened up and started taking money seriously. Still, those past sins can come back to haunt you in the form of creditors or less-than-impressive credit scores. Your best bet is to face money issues head-on and atone for those missteps before you can move on to better habits in the future.
When dealing with past financial mistakes, it's easy to turn a blind eye and hope that they simply go away. But when you owe money or default on loans, not only are those creditors still looking to get paid, it can affect your long-term ability to secure credit and have financial freedom in the future. Instead, gather up all of your statements and go through them with a fine-tooth comb to give yourself a general picture of which mistakes you've made and which can be easily rectified with some hard work.
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Once you know where you stand money-wise, it's time to create a plan to pay back creditors, and remove incorrect information on your credit report. This may require some leg work on your part, so plan on working with creditors on settlement deals, checking your credit report and contacting reporting agencies to remove mistakes or inaccuracies that you've found. Consider your plan like you would a work project: Focus on a plan, then put your energy into accomplishing it.
No one is saying that you need to move all of your savings into paying off an old debt to get rid of it. In fact, starting with smaller debts - an old credit card or small tax bill, for instance - not only helps you get rid of some of your smaller mistakes, but it can also help give you a sense of accomplishment. Start with the most manageable issues. That way, you'll have more of a leg to stand on when negotiating with larger creditors and money issues.
Once you've made headway on some of your smaller money mistakes, it's time to get serious. Keep up the good work by taking a look at your current budget and cutting back spending to free up money for payment of other debts or making settlement agreements with other creditors. When you have cash in hand, creditors may be more willing to settle, but you'll need to be prepared to act immediately. While it might mean a few months of leaner living, having a clear conscience and rectifying the mistakes of the past can help you move forward with your future financial goals.
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