Excessive amounts of debt can cause stress and a reduced quality of life. At the end of each month, you barely break even, or worse, you end up with a deficit. Unfortunately, this way of life often leads to missed or late payments resulting in poor credit. The good news is you can turn your finances around, one day at a time.
Freeing Up Money
Large sums of credit card debt from multiple sources can make it difficult to reduce the balances. Thankfully, companies like Hawkeye Associates specialize in debt relief offer consolidation loans. The fixed, single monthly payment and lower interest rate allow you to pay down your outstanding debt faster.
The Household Budget
For some people hearing the word “budget” means a life without. However, when you create and stick to a budget, you’re actually doing the opposite. A household budget identifies the amount of money you owe out and to whom. This lets you set long-term and short-term achievable goals.
To do that, you want to list everything you owe out, including annual and semi-annual payments like taxes on a sheet of paper and deduct your net income from the balance. If you prefer, you can print a sheet using one of the free budget spreadsheets available online.
Eliminating Future Credit Card Debt
Lack of a budget and poor spending habits can cause you to gain insurmountable amounts of debt, in short order. In order to break the debt cycle, you need to change your spending habits. Credit cards only benefit you if you’re able to pay the balances in full each month. If there’s something you want, save for it instead of buying it on credit. You’ll spend only what the item costs with no additional interest and you’ll learn how to save money.
The Rainy Day Fund
Life happens, and it’s only a matter of time before something breaks that requires money to fix it. Most times, things go wrong at the worst possible time regarding your finances. The good news is if you have a savings account designed for emergencies, you won’t have to borrow from money already allocated for bills. Your bills will remain paid on time, eliminating late fees and a lower credit score.
Lowering Overhead Costs
If you find yourself living paycheck to paycheck and strapped for cash, there are several ways to lower overhead costs. Bundling services such as your cable, internet, and cell and home and auto insurance are a few examples that can save you a hundred or more each month.
Running the dishwasher and washer and dryer during off-peak hours and replacing traditional light bulbs with energy-efficient LEDs will help reduce utility bills. Upgrading your thermostat to a programmable digital model will keep you comfortable while at home and eliminate waste. If you have a mortgage, consider refinancing to enjoy a lower interest rate.
Saving on Food, Clothing and More
Before heading to the store to do the weekly food shopping, create a comprehensive list and stick to it. Then, check the weekly flyers of the local supermarkets in your area to compare the prices. Unbelievably, all stores don’t always have the same items on sale. Going online and printing out coupons for the items on your list will provide additional savings.
For buying clothing, furniture and other essentials, look for sales. Often during holidays or off-season, you can find items reduced significantly.
Living Within Your Means
Trying to keep up with a family member, friend, or neighbor when you don’t have the money is a sure recipe for financial ruin. With a household budget and the elimination of wasteful spending, your day will come. Good money management will allow you to fulfill your dreams of owning a home, buying a car and sending your children to college.
Excessive amounts of debt can lead to daily stress and a poor credit score. Thankfully, you can turn your finances around. Consolidate debt, eliminate wasteful spending and learn the importance of putting money away for a rainy day.