Get organized! Paying your bills on time will help you avoid late fees and penalty charges.
Prioritize your debt. Decide if you want to start paying off the smallest debts first or begin with those with the highest interest rates. Either way, you control your debt payments. Once you pay off your first bill, you should add the payment amount to your next bill in order to reduce your remaining debt faster.
Examine your spending habits by tracking all of your income and spending on a weekly and monthly basis. Do this for at least two months and use the information to create your monthly budget.
Follow your budget to manage your daily spending. Use the information from your budget and spending tracker to be honest about what you can afford. You should aim to spend less than what you earn. If you’re having an issue with balancing your budget, start researching frugal living tips to save money. Some ideas may include:
Save as much as you can afford. Pay yourself in your budget, just like a bill or creditor. You can use your savings to:
Make use of online banking as much as possible. In many cases, you’ll be able to set up payment reminders, schedule future bill payments and review your spending.
Maximize your employee benefits to ensure that you take advantage of retirement savings options, flexible spending accounts and health benefits that might lower your taxes or out of pocket expenses.
Set specific financial goals for your household. Begin with your short-term goals (attainable in 4-12 months) and then expand to your long-term goals (attainable in 3-5 years).
You don’t have to be a financial guru to manage your money. With a combination of financial guidance and discipline, you should be well on your way to living within your means and increasing your personal wealth. Your family members must understand the importance of saving so that they can assist in controlling expenses. So openly discuss individual spending, personal allowance and financial goals to include the entire family. If you are constantly spending more than you earn and delving deeper into debt, we recommend that you seek guidance from a qualified and reputable credit counselor. These financial professionals can assist in negotiating with your creditors, creating debt consolidation plans and finding alternative repayment options that may potentially help you get out of debt faster.