If you are the type of person that spends money that you should not, and have trouble saving, there is help on the way. If you are behind on paying off your credit cards and loan payments, you have options for getting your life back in order through a few different actions:
Credit Counseling
Credit counseling can be very beneficial for you. You can set up an appointment with a counselor in your area, and they can review your budget with you. In most cases, you are not charged anything for this. If you decide to sign up with the agency, your credit card issuers will likely reduce the interest rates on your account. You will be able to make one monthly payment to the credit agency that they will use to pay each of your creditors.
When you first arrive, they will look over your financial situation. Many agencies will help you create a plan to manage your money, as well as a debt pay down plan. They may also provide you with free workshops and resources to help you manage your money.
Snowball Plan
If you have several credit cards and only pay the minimum payment on them, it can take years to pay them off. The snowball plan works well to help you pay them off quicker.
Gather your credit card statements, and sort them by the lowest to the highest. Start out paying the most money on the lowest credit card, and then pay the minimum payments on the rest. When you get the first credit paid off, add the money you were paying on it to the next credit card along with the minimum payment you were paying on it. When that one is paid off, move that money up to the next one, and so on.
Create a Budget
One of the most important things you need to do is to create a budget. Tracking the money you are spending is helpful. Keep a notebook with you, and write down every dollar you spend no matter how small it is. This can help you see where your money is going.
Calculate the amount of money you make each month, and then calculate your expenses, including things such as your house payment, car payments, loan payments, groceries, entertainment, clothing, etc. This shows you how much you need each month to pay for everything.
Set up a budget worksheet using a spreadsheet program. There are templates you can download free online, if you prefer. Put everything in the worksheet listed above, along with the exact payments for each thing. This shows you what needs to come out of your check each week to pay all of your bills. If you have anything left over, put it in a savings account.
Getting out of debt takes time, but it can be done. Follow these tips to get your finances in order. When you are debt free, you will feel a huge weight lift off your shoulders. If you want to know more, click here for info on debt management and credit counseling help.
Share8 December 2014
