Avoid Debt
Sometimes it’s hard for us to budget our income. Especially, the high prices of goods and fares in our economy. There’s no chance in buying things that are not useful. We focus more on meeting our neccesities. But what can we do? Budget. Yes, we can have it but unproper way can lead us to more debts.
Let’s avoid debts. As much as possible let’s just buy things that are consumable for longevity and practical. Let’s focus on meeting our needs like foods and home goods. If we still have good clothes and shoes, we can set buying this aside. If we are meat lover, why not try eating fish and vegetables. It is cheaper and nutritious.
Let’s avoid using credit card when we still have previous balance. Let’s pay first the previous one before making a new credit. Through this, we can avoid paying higher interest for the long time.
Be a smart spender.
What to Do When in Debt
So you’re in debt? What do you? I suppose you could sit on your couch with your hands running through your hair worrying but really, what is that going to do for you? It’s actually going to make matters worse. I am speaking from experience. My husband and I have been married for almost a year now and have been dating for 3 1/2 years before we married and have been in debt pretty much since we started dating. You know how dating goes; spend and spend some more! Eventually that whole lot of spending will add up and pretty soon, before you know it you are in a little bit of debt. AND of course the old saying comes back to haunt us all “when it rains it pours!” Boy is that statement true! As soon as my husband and I were in a small amount of debt (I wouldn’t have even called that debt yet) his car decides to conk out for the next 3 years once every year therefore making our debt bill even bigger! So now we are up to our necks in car payment debts and his car is still on the fritz now and then! The way we are handling it is by trusting each other that we will pull through this be it sooner or later and when it’s over we will feel so good! Also…my husband and I threw out all means of Credit cards seeing how they just put you through you debt even more and made a spreadsheet telling us how to do our billing and payments. Believe it or not, after writing it down nice and organized things are finally falling into place. Lesson? Set a goal for yourself on paper and follow it through and through!
heather
Work with Creditors and Cut Back
With the economy going downhill and difficulty getting a paycheck, it can be hard to fix finances. One key thing to remember when you are living paycheck to paycheck, is to work with your creditors. Many of them will work with you to make a partial payment. Even if you pay just a few dollars on the debt, that is better than nothing. It shows them that you are really trying.
Cancel anything that is not absolutely needed. If you have multiple credit cards, cancel all but one. Focus on paying off the other cards and then cut them in half. Make sure to send a written letter to the finance company or credit card company to let them know of the cancellation.
Do you really need DVR service? Do you really need that extra tier of cable service? Could you do without the call waiting, extra minutes and unlimited text on your cell phone for a couple of months to get caught up on bills? Look closely at what you spend on and think of ways to cut. Cutting out expenses will help the most for fixing finances. Living within your means and taking steps to get out of debt, not only creates a better financial situation, but often a better and less stressful lifestyle.
Avoid Going Into Debt To Improve Your Credit Score
Many people try to fix finances by going into debt to improve their credit score. They think that the more credit cards they have; the better. This is not the case at all. Having a lot of debt in comparison to what you make is not a good thing. In fact, it will only serve to hurt your credit score and you end up paying a great deal of money in interest.
If you can afford to pay a large down payment on an item, such as a car, do so. Taking out a car loan just to improve your credit score is a recipe for disaster. You cannot fix finances by adding more debt to your current debt. This ends up digging you further and further into debt and risking an even lower credit score.
Pay a Little Extra Each Month
Do you have a mortgage? Is it 25 years, 30 years or even longer? The majority of mortgage companies will allow you to pay extra each month if you can. The idea is to make certain to pay on the principle and not the interest. The principle determines the amount of interest that you pay. If you pay a little on the principle each month that is extra, you will in the long run end up fixing your finances and paying a lot less in interest.
Make certain that you pay a minimum of $5.00 extra each month. On the month’s that you can afford to do so pay as much as $100 extra toward the principle. Doing this every month will greatly reduce the amount of interest that you end up paying on the mortgage.
Talk to Debtors
When it comes to paying bills and having trouble with finances, one solution to fix finances is to talk to debtors. Often, they will set up a reasonable payment plan with you. Some credit card companies will even let you take a huge percentage of the debt off if you can pay it off. For example, if you owe a thousand dollars but can pay off $600 they might consider the debt paid and clear the account.
Don’t just not pay. Call the debtors and talk to them. Explain to them that you are out of work or that things are slow. Give them a time that you will be able to send them something. This shows that you are trying to get out of debt and fix finances. It will save you headache and they will know that they will get their money.
Take Advange of Coupons
One of the first things I learned when I went to fix my finances was the great use of coupons. You can save a great deal of money with coupons. One way to help fix your finances is to take advantage of coupons. It used to be that you would have to purchase the Sunday edition of the local newspaper to get coupons. Now there are numerous sites on the Internet that you can print out coupons to use at your local stores.
Use coupons on items that you would already normally buy. Just because you have a coupon for sardines, does not mean that you have to use it. If you normally don’t eat sardines, then throw that coupon away. Yet, if you have a coupon for peanut butter, go ahead and take advantage of the coupon and use it.
Consolidate Bills to Fix Finances
There comes a time with the poor economy that many people are facing challenges paying their bills. Credit cards are mounting up and the bills just seem to get larger and larger. One option that you might consider to fix finances is to consolidate your bills. Consolidating bills can be a terrific way to get our of debt.
If you have poor credit, you can consolidate bills. This will give you a lower interest rate. Some of your bills will be completely paid off and start to have time to improve your credit score. Just be certain to pay the monthly payment on the bill consolidation on time. You’ll find that you pay less in the long run and often can make lower monthly payments to help you get ahead.
Use Tax Rebate Wisely
Many Americans are expecting or already beginning to receive a tax rebate to help and stimulate the economy. This can help many people that need assistance to fix finances. The first thing to do is to really look at your bills and your finances. It might be tempting to take a small vacation or even get a new television, video game or set of dishes. But, the key to fixing your finances is to look at the big picture.
If you are behind on your bills or have credit card debts, don’t give into the temptation to use the tax rebate on non-essential items. Go ahead and catch up the bills. If you have enough left, send even just an extra $5 payment to each of your credit cards. This can really help you work on your bills and your credit cards to fix your finances.
If you don’t have a lot of bills piling up and the credit cards are all paid, put the money in savings. This will enable you to use it later down the road if you are having finance problems. Don’t take the tax rebate money and use it on things that you absolutely don’t need.
Use Your Hobbies to Create Income Streams
Whether your goal is to pay off debt or build wealth, chances are you can use some of your interests to generate extra money. Some of the ways to make money with your hobbies are to offer lessons, blogging, selling arts and crafts or providing services.
If nothing else, monetizing your interests can offset the costs of enjoying them in the first place, leaving more money for an emergency fund or investments.
Etsy and Silkfair.com are two Ebay auction alternatives to look into if you’re crafty. Rather than looking for the “best deal”, customers are looking for beautiful handmade items and recognize fair prices.
Are you a hobby photographer? Look into selling microstock pictures. Prices are low and buyers pay no royalites, but you cna sell the same picture hundreds of times. One major player is IStockPhoto.com, which requires quality approval, but a search on microstock brokers will yield many results.
Selling services related to your hobby is another way to build wealth. For example, if you are an animal or nature lover, advertise on places like Craigslist for dog sitting or organic landscaping. Painters can translate their experience to mural painting and faux finishes for peoples homes. Musicians can give lessons. Are you great with computers? Or writing resumes? The possibilities are endless.
Blogging about your hobby can also yield small amounts of money that add up. Pay per post forums, paid blogging networks, or monetizing your own blog with adsense are all ways to make money online with writing. Sites like Ehow pay your for your “How to’s” via revenue share and Associated Content pays $3-$20 plus a page view bonus.
While you won’t “get rich” from most hobbies, you can enrich your life by incoporating them into other income streams. How does an extra $50 a month towards debt or savings while still being able to enjoy your interests sound? Priceless.