Half the Income But All the Bills
A TV commercial for a debt consolidation company aired recently where one woman told us that her work hours got cut in half, but she cannot pay half her bills. Living on half your income, as they say, means that you need to find other ways to cope. So, they want you to consolidate your debts with them. Paying your bills on time can be a good thing, but if you go into debt doing it, you need to re-evaluate your budget. And credit cards are a very bad way to pay your bills. Smart budgeting can help you reduce your expenses drastically.
Reduce Expenses
To pay your bills without credit cards, the first thing you need to look at is how much money you are spending every month. If you lie about how much money is going out the door, you will get further into debt! If you spend more on entertainment costs than your bills, re evaluate your budget quickly. This may include spending money that you do not have. You need to match your standard of living to your current income. Frivolous expenses must often be cut if you want a budget that balances well. Many people lost their homes in the foreclosure fiasco because they could not afford the high mortgage payment. If this is describing you, you need to sell your house. A car payment of $ 400 per month may be more than you can afford, so you must sell the car.
Take the time to evaluate how much money you can really afford on your transportation, housing and food costs. A budget on paper does not equal action. You must take action on the budget you have created for it to work. Lowering your bills means you must take the necessary steps.
Debt Repayment Plan
With the massive credit card hikes that have been charged to many people lately, it is imperative that you pay off your credit card debt as soon as possible. You will lose more money to your debt in the long term if you do not pay off your balance now. Debts do not go away on their own, so create a plan to pay them back as soon as possible. A proper debt repayment plan includes cutting up your credit cards. You not need credit cards to survive on, even if experts tell you otherwise. Take the time to create a sensible budget so that you can live within your means. Many people seem to think that you need a credit card to handle any emergency that may come up. Experts advise you to save at least eight months’ worth of income should you lose your job. Even if you may not have a lot of time in your emergency, you can apply online for an emergency cash loan to get you through the rough patch.
Increase Your Income
No budget worth its salt is complete without a plan to increase your monthly income. If you have lost half your income due to less work hours or even a lost job, you need to put a plan in place on how you will replace that income. Others will pay you for a skill, even during the recession, if you can provide a large amount of value to them. Think about what you enjoy doing and how you can create an income from it. Organizing someone’s house or office may work if you like to organize. Or you could try party planning or even babysitting to get you through this tough time. There is money to be earned if you can explain difficult concepts with your writing. Make a list of your hobbies and skills. Turning a hobby into a business may eventually replace your income from your job.
Smooth Sailing
After creating and implementing your sensible budget, you will wonder how you ever lived with credit card debt in the first place! A budget itself does not transform your finances. Rather, it takes a lot of hard work and effort to implement even the small changes. Even with the occasional emergency cash loan, you can create a simple, yet easy, budget for the rest of your life!
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