Practical tips to help you improve your credit rating and avoid expensive high interest loans
Effective debt management is essential for saving money and making the most of the amount you earn.
However, it can often be difficult to show the financial discipline needed to ensure that you do not make a bad situation worse.
Being financially responsible will require some hard work in the very beginning.
Think about your behavior, identify the biggest mistakes you’ve committed and chosen the right possibility for decreasing spending.
You don’t have to introduce major lifestyle changes in order to maximise savings and get out of debt.
If you feel as though you are ready to start making the changes you need to bring your debt down, the following article will offer you 4 steps to help you along the way.
It’s very easy to start writing down notes about each amount you spend and the type of item you spend it on and you’d be amazed how quickly this helps to paint an accurate picture of your expenditure.
Keep up the practice for several months and you’ll figure out what your money is dedicated to and whether you wasting money.
This great article titled ‘6 Ways To Track Your Spending‘ by Forbes offers a number of great tips and is well worth a few minutes to read through.
Keeping track of spending will reveal patterns and enable you to become much more efficient and reasonable. There are certain kinds of expenditures that you need – utility bills, food, medicines, and transportation all rank among the essentials. You can, however, limit the amounts you’re spending on clothing, cosmetics, and entertainment.
Once you have done this, you can set yourself a budget to determine the absolute minimum amount that you need every single month.
For more tips on working to a budget, please check out the following ‘Money Saving Expert’ video:
Whilst the odd treat from time to time does no little harm, a few too many treats can often become a big problem in regards to spending money.
Prioritising the essentials over the treats can go a long way towards freeing up some extra money each month.
Owning a credit card can often create a false sense of financial wellbeing. In fact, credit cards can often be the root cause of the debt building in the first place.
Cutting up your credit cards is the one sure way to ensure that you are not tempted to use them again and make your debt situation worse.
Next, you should make steps towards improving your credit rating.
Reducing all kinds of debt that you have, paying loans on time, refraining from taking new loans and making sure that your report is error-free will all be important.
Improving your credit rating is something that can seem a little daunting but with a little knowledge, it is definitely achievable.
You never know when and what you’re going to need money for. Dedicate a small amount of each salary to an emergency fund.
This money should be kept available for emergencies only.
The amount could be small – start with five or 10 per cent of your salary. As time goes by, you can begin dedicating larger amounts to the emergency fund. You should also have a really good idea about what the money’s going to be used for.
The emergency fund shouldn’t be kept at home. Put the money in a bank so that you’ll benefit from the interest rate. Otherwise, the inflation will decrease the value of the amount you’ve managed to save.
Making inroads into your expenditure can play a key role in helping to create some extra money to put towards your savings. Trent Hamm over at ‘The Simple Dollar’ has written a tremendous article that targets a variety of ways to make the desired cutbacks.
Whilst this is aimed primarily at an American audience, many of the ideas are still valid in the UK.
IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY