Are you denied for debt ?
Debt is bad news. There are exceptions such as mortgages that help you build your assets and student loans for the education to give you better career prospects. Unfortunately other forms of debt will not have such a positive impact on your life. Indeed they can make your life a misery. Why do people tell themselves lies to justify their financial problems?
- Debt helps my credit score which is a major factor in obtaining credit. It's not true. Although you need to have credit entries to develop a history, lenders will look beyond your score when looking at an application for a loan so get realistic payday lenders support . Indeed modern online lenders tend to look to the future and your ability to repay a loan in full rather than at your past history. It may cost a little extra if your history is poor but successfully repaying this new loan can help you build up your score once more.
- Everyone has debt so why shouldn't I? Well that is no real justification for having debt. It is not as if anyone else is going to pay it off for you.
- I'm just poor with money. You can tell yourself that but the answer is to learn about financial management and devise a budget that will provide you will a monthly surplus. There is plenty of information online to help you begin to understand the subject.
- Sometimes you may tell yourself that you deserve to spend money because you have earned it. Whether you can afford some purchases or not is a crucial question. Credit cards allow you to buy now and pay later but they charge a high level of interest if you fail to pay the full amount on the monthly statement when it comes in.
- Emergencies do happen and settling a pressing bill can result in debt. Telling yourself that paying a bill that you knew was coming is an emergency is fooling yourself.
- Debt is justifiable if you find a bargain. Again it will not be a bargain if you buy on a card and find yourself paying interest on the purchase over the following months until you have paid for it in full.
- I'll start to plan next month is a typical response from someone in financial trouble. There is always an excuse to put things off until a point in the future. The older you are the closer you are to retirement when your choices will be limited.
No one can be forced to do anything about their being in financial trouble but it is a situation that they should acknowledge and act. The challenges include:
- Getting rid of expensive debt such as credit card balances.
- Looking at economies which do not necessarily involve sacrifice. You should look at finding cheaper sources for utilities, telephone and insurance.
- Seeing if your daily spending on cafes, coffee shops and bars can be replaced by making a sandwich and coffee for lunch and perhaps opening a bottle at home?
The whole exercise begins with preparing a budget and including even the smallest cash purchases that you are making. If when you list your expenditure you are spending more than you earn you are in trouble. You need to address that and ensure you have a potential surplus each month that can be used in a positive way; reducing your debts and investing in your future.
You must get to a position where your income exceeds your expenditure. You may perhaps have been funding your current lifestyle by taking money from an ATM on your credit card? If that has been the case and you have built up a balance as a result you must stop that and see where you can make those savings suggested above.
If you can see a way to make extra income that will have a similar effect to reducing expenditure. Ideally you should look to do both in order to maximize your potential saving each month. There are several ways to make money on the internet ranging from trading to blogging.
Flexibility & Reality
Your first attempt at a budget may not be accurate. You may have missed something out or perhaps some of your estimates have been incorrect. There is nothing wrong with revising your budget to what has happened in Month 1 or Month 2.
If you are in debt it is important not to tell yourself that you are in complete control; you will rarely be in that situation. You must face the reality of the situation and act before the situation gets worse. If you need help then seek it out. It may be embarrassing talking to family and friends about your difficulties but the consequences of slipping further into debt can be much worse.