4 Ways To Get Out of Debt and Manage Your Monthly Budget

numbers-money-calculating-calculationBudgeting and staying out of debt. It’s something we can all do better. We know that there has to be some kind of change, but do we really know where to start? Lucky for you, we did all the hard work. Now all you have to do is follow through on these great ways to manage your monthly budget better.

 

Automatic Bill Payment

 

Using an auto-payment service can save you time, stress, and money in the long run. AutoPayPlus offers a service that is unique because not only does it allow you to avoid costly late fees or manage your bills in one place, but also works with each of your lenders to implement an accelerated debt reduction payment schedule. AutoPayPlus helps to get you out of debt faster and potentially help to build you valuable equity and/or reduce total interest payments.

 

Never worry again about when your bills are due or the possibility of “snowballing” into debt. Get your loans paid off quicker and tailor your budget towards a life that’s debt-free.

 

Loan Consolidation

 

A loan consolidation can be attractive to people that are up to their neck in debt. Though the appeal of a paying a single monthly payment at a low interest rate seems like a promising one, it will probably cost you more in the long haul. The odds are that you won’t want to get yourself caught up doing a loan consolidation unless you’re truly and hopelessly drowning with high interest rates and high monthly payments.

 

But if that is the case, understand what your monthly payment will be. If it’s just as much, or higher but fits into your budget, you might simply want to consider paying off your bills on your own with increased payments. Otherwise you will probably end up paying more in interest payments, since your loan will likely be over a long span of time.

 

Debt Management Plan

 

Choosing a Debt Management Plan can help you stay organized and on time with your bills through realistic budgeting. Most financial experts recommend using a DMP as the best method for debt consolidation. Through this method, you send one payment to the agency running it and then the amount will be split amongst your creditors. This might affect your credit score, but once you have paid of your debt in 3-5 years, your score should definitely improve.

 

With the help of a certified credit counselor, you can be on your way to meeting your financial goals, improving your credit, and being in control of your finances.

 

Debt Prevention

 

The best way to manage your debt and your budget is to avoid debt in the first place. Of course, it’s easier said then done. But the earlier and faster you come to terms without the idea of smart budgeting, the earlier you will be living a life with less stress.

 

First understand why many people get into debt:

  • Reduced income
  • Poor Money Management
  • Underemployment
  • Gambling
  • Medical Expenses
  • Minimal Savings

 

What you can take away from these debt causes is that you want to put yourself on a strict and realistic budget that allows you to balance your income from your expenses. When you have extra money, put it into a savings account for those unexpected expenditures. Avoid overspending on things that aren’t necessities and be sure to plan. If you’re already in debt try one of the other three methods and when you succeed, don’t ever go down that road again.

5 Easy Steps to Saving Money

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business-money-pink-coinsIt often seems almost impossible to even think about starting a savings these days. With a little bit of effort and creativity it can be done. Here is a review of five easy steps according to the Federal Trade Commission that anyone can do to start saving money.

The first step is know where you’re at with your money. Compile a list of all your income, this can include any money you receive on a consistent basis. Then list all your fixed expenses such as mortgage, utilities, and cell phones. On a separate list, write down all your variable expenses. These would be items such as clothing, entertainment, gifts, and even your daily latte at your favorite coffee shop. The small expenses do matter. Now you know how much money you are bringing in and how much you are spending.

The second step is to set up a system where you pay yourself first. This could be an auto-deduction from you paycheck into a payroll savings plan, or an auto-transfer at your bank from your checking into your savings. Whatever method works best for you, this is an important step to guarantee you are putting some money into your savings on a regular basis. At first it will be a bit harder. Once you get used to not having the money to spend, and you see your savings grow you it will get easier.

The third step is a little more complicated, but don’t worry you can do this. Learning about and understanding compound interest will help you with your goal to save. The Federal Trade Commission explains compound interest as “the interest you earn on your initial investment plus all the interest that accumulates over time.” There is compound interest and simple interest. Simple interest is when you earn interest on your initial investment only. Compound interest is the better investment.

The fourth step is a pro-active step to savings. When you have “extra” money, you put it into your savings. When you get a raise take the additional money and have that transferred into your savings. If you pay off a debt such as a credit card or car payment, take the monthly payment you would have made and transfer it to your savings. To make it easy, have this automatically transferred from your checking to your savings.

The fifth step is be creative about saving money. Local beauty school students often give free or reduced haircuts. How about bringing a homemade lunch to work. Instead of buying books, music and DVD’s, get them from your local library. All you need is a library card. They give those away for free. How about using old-fashioned bartering. You have skills, and people need your skills, and you need their skills. It’s beautiful and free.

Saving money doesn’t have to be difficult or painful. You can enjoy your coffee shop latte, just cut back to once a week. AutoPayPlus could help you save yourself over fifty dollars a month with just that simple step.