It shouldn’t be too hard to budget. And if you do it properly, you also shouldn’t get into financial difficulties. Even if you have to find payday loans direct lender options, you should be able to have it paid off quickly. Go out for a meal a little less often, don’t buy a new outfit every month and keep the treats to a minimum should be all that is needed. However, as simple as it all seems, the real difficulty is keeping money in your own bank account, instead of it all being paid in interest.
How to Budget
You must monitor your incomings and outgoings. Usually, you know when each bill comes out and how much they are. You must also work out your monthly payments to bills that are actually paid out quarterly or even yearly. If you have payday debt, you may also have to pay weekly or bi-monthly. You must make sure that you have money available to pay all your debts and still have money to eat. The best way to budget that is by pretending every month is the heaviest month. This could even leave you with a bit of money to spare at the end of the lighter months.
Do this for a full month, which should be your observation month. If you have done it properly, you should be able to account for every dollar that goes in and out of your account. What is more likely, however, is that you will find that some money is wasted somewhere and that you didn’t even notice it. This is the money you have to keep your eye on, and you should use this to reduce your debt overall.
- If you have payday debt or other short term loans, allocated any unnecessary spending money to those debts. This is because they carry the highest interest.
- Try to lower your credit card debt. If your debt is more than 20% of your credit limit, it will actually negatively affect your credit score.
- Have a separate account for emergency savings. Any money that is not spent should go in there, so that you have money to spare for financial emergencies. Do it right, and you may no longer have to turn to payday loans in the future.
- Do not add new debt to your existing debts, unless it is a way to bring interest payments down overall.
Managing your finances doesn’t need to be complicated. It does, however, have to be tough. You have to be honest with yourself and identify the areas in which you really spend too much. It is ok to treat yourself every once in a while, but you have to be realistic as well. If you treat yourself to a meal out every week, you could try reducing this to every month. Or swap it for a drink in a café instead of a full meal. These are all simple methods to keep more of your own hard-earned money to yourself.