Half the Income But All the Bills
Photo: flickr.com via spiderpop
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. If your income gets cut in half, how are you going to pay your bills? That was the question from the commercial. Should an emergency come up and you take out an emergency cash loan, there is no reason you need to go into debt just by paying your bills. You cannot use credit cards to pay your bills. Debt consolidation can help you lower your expenses by working with your creditors, but better results can be achieved by reducing your variable expenses.
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 are not honest with this, you will pay in the end! If you spend more on entertainment costs than your bills, re evaluate your budget quickly. Spending money on little things really adds up. Look at this as well. A large house, fancy car, and all the amenities may cost too much for your current income. Budgeting often requires you to make hard choices on what to pay for and what to let go of. For example, paying more on a mortgage payment than you can afford may force you to sell the house. If your car payment per month is double what you can afford, sell the car and get something cheaper.
Take a look at your housing, transportation and food costs to see where you can realistically cut down your expenses. Cutting expenses is the first step. Next, you need to create a budget that you can put into place immediately. The steps you take now to lower your bills will ultimately be worth it later in life.
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 are going to have to pay more money if you wait to pay down your credit card balance. Create a debt repayment plan in your budget, so that you can get out from under the debt that much quicker. Debt repayment really depends on not creating new debts, so cut up your credit cards now. People may say that credit cards are a necessary evil, but they are not necessary at all. Instead, you can live within your means if you take the time to create a sensible budget. Credit cards may be able to help you in an emergency, but a sensible budget works better in the long term. Eight months of income should be set aside in case something comes up to cause you to lose your income source. An emergency cash loan may come in handy if you have some time on your side.
Increase Your Income
No budget worth its salt is complete without a plan to increase your monthly income. Replacing income after losing a job or having your hours cut can be tough. You must create a plan that shows how you will do that. You need to find a marketable skill that you can do in order to survive the recession. People pay for a lot of different services. What do you do that you could be paid for? Party planning, organizing, or even babysitting could help you earn extra money. Your writing skills could help you make some decent money. Your talents and skills may help you get into something you love doing, so take an inventory and see what you can come up with. After working on setting up a part time income, you may eventually find something that will be a full time income.
Smooth Sailing
After creating and implementing your sensible budget, you will wonder how you ever lived with credit card debt in the first place! Living within a budget is not easy, and it means that you will have to work at it. Emergency cash loans aside, you can still have a simple budget if you follow these tips!
