A Few Simple Debt Management Tips
Creating a budget and living by it can really be tough especially if you make a pretty good income and are accustomed to buying whatever you want when you want it. However, this attitude and these shopping habits will wind you up in debt sooner or later. The best thing to do is avoid getting into debt altogether however if you are already in debt you probably would like to know some tips to help you get out! Basically, you need to create a budget, manage your debt, and before you know it you will be debt free. The following information will help you.
Determine Your Debt To Income Ratio Before you do anything you must determine your debt as well as your income. This means being completely honest with yourself and pulling out all of your credit card statements. Then, you can see how much money you have to pay each month to your creditors and how much money you have coming in. If you don’t have enough coming in to pay the bills then that is a problem and consolidating your debt could be a very good plan for you in this situation. However, if your income is enough to pay your bills yet you are still struggling then you can probably handle this on your own with a little self discipline. Regardless of which boat you are in you need a budget.
Creating a Budget Creating a budget might not sound like a lot of fun, but it is a very structured way to live and it will allow you to pay your bills, get ahead, and maybe even save for retirement with what’s leftover. So, consider where you waste money and eliminate those actions. For example eating out is always more expensive than eating at home. So, plan three meals a day at home. You can even shop with coupons to make your savings even higher.
Another is your electricity bill. You might not know it, but you are probably paying more than you have to simply because you don’t open your windows in the Spring, leave lights on when nobody is in the room, and the like. Be cautious and your electricity bill will go down and save you money. Also, consider carpooling. You will save a lot of money on gas. Another suggestion is to subscribe to basic cable and rent movies instead of taking the whole family to the theater. These are just a few suggestions, but as you get in the habit you will really notice how much money you are saving and how much easier it is to pay your bills.
Organise Your Finances Start by figuring out how much money you bring in every month and how much you put out on bills. While this may be a tiresome and depressing task, it’s necessary to make an honest budget. Trying to ignore and forget about your problems will not make it easier for you to cover your bills. The first step is to jot down your monthly expenses and break them down as much as you can. Do you see non-essentials expenditures that can be cut out? Are you dishing out more than you should be on one thing? Putting all these numbers on paper can help show you your complete financial picture and will help you make the right choices.
Consolidate High Interest Loans Every loan payment consists of two parts – the principal on the debt and the interest on the loan. You will be paying a lot of interest if you’re making monthly payments but not paying off the balance in full. Just making the minimum payments on high-interest loan(s) will also accrue you lots of interest. You will pay less interest and cut down the principal faster with a consolidation loan as opposed to the minimum payment not even covering the interest.
Start Saving Up It’s very difficult to save money when you’re already in debt, but make an effort to put away a bit each paycheck if possible. You will most likely avoid taking on high-interest loans or using credit cards if you have a bit of money set aside for a rainy day.
Don’t Take On New Credit Once you get your debts cleaned up, keep it that way. With an improved credit record and your debts managed, it’s very tempting to take on more credit. If you don’t need it, turn it down. Applying for credit too many times can look bad on your credit report.
Clean Up Any Inaccuracies On Your Credit Report After you get rid of your debts, there could still be inaccuracies on your credit report. These will hurt your credit until you resolve it. You are legally entitled to look at your credit report and can easily fix mistakes once you see them and report them to the appropriate agencies.
Financial Claims You can also claim compensation on any financial products that you have taken out where you believe you have been mis sold the product of the insurance that accompanies it. For example, if you had taken out a Loan from the bank pre 2010, then a very popular mis selling tactic that was used was adding Payment Protection Insurance to it. This was a “front loaded” loan and the compensation you could get would be the PPI, plus the 8% per annum compensation amount.
www.haveigotppiuk.com is one of the best ppi claims company that provides you with useful calculators and a free PPI check in order to determine if you can claim. If so, you could end up with an extra few thousand pounds that you would not have had before.