When you’re in debt, every day is stressful. You can’t sleep, you don’t eat right and you spend many of your awake hours worrying. The good news is that you can change your status faster than you might imagine. All it takes is dedication and commitment on your part and a rethinking of how you view money. Many people who live paycheck to paycheck receive windfalls of cash such as their income tax and instead of putting it away for emergencies, they spend the entire amount on items they want versus what they need. If you are ready to break bad habits and start living and enjoying your life, you can do it.
When you live paycheck to paycheck you are also setting yourself up for disaster. If your car needs work or an unexpected household repair comes along you end up using your bill money to pay for it, leaving you struggling to make it through the month. And once you make a few late payments or even miss a payment taking out a loan from a bank to get back on track isn’t an option you can use. The good news is that for the immediate future, you can apply for online installment loans. Companies like Maxlend Loans provide personal cash loans and installment loans in amounts up to $1250 as an alternative option to payday lending. Key benefits include minimal eligibility requirements, fast funding and flexible repayment. Qualified applicants must have a social security number, an active checking account, and a verifiable source of income. While this will help you to get over the hurdle, it should not become a way of life.
Establish and stick to a budget
You’ve heard it before and before you go thinking it’s easier when you have money to work a budget, that’s the whole purpose. In the beginning, you will test your resilience but, if you stay the course, you will break free from the paycheck to paycheck lifestyle and enjoy financial freedom. Gather your bills, set aside a few hours and find a quiet place to lay them out and list them. Include all of your household expenses like your mortgage or rent, utilities, cable and cell phone bills, any loans and credit cards. Then make a list of the average weekly cost for gas, food, child care expenses and whatever else you need to pay for during the month.
Reduce the amount of debt
Once you have the list together, it’s time to prioritize them into categories. Your mortgage or rent, house bills and personal loans fall into the must pay, then your credit cards. If you bring in enough to cover all of your bills then getting back on track won’t take long. All you need to do is to pull in your belt for a month or two and you’ll be in good shape. Refrain from things like eating out, buying a coffee on the way to work and brown bagging your lunch instead of ordering out will all help to give you the little extra you need to recover quickly. If you add up the numbers and you realize, maybe for the first time, that you don’t have enough coming in to pay for everything, then it’s time to pay your debt down fast. You can do this by reducing your cable bill to basic service and your cell phone too.
Also, if your credit is still in good standing you can transfer a credit card balance over to a new card that offers an introductory no-interest rate for 6 to 12 months. All of these things will help give you the extra money to balance your budget and pay your expenses each month. Once you are even then you need to start paying down your debt. You can start by paying off a few of your credit cards. You don’t need to have more than two and reducing the balance and the amount of open account will actually help to raise your credit score. Once you have these under control then follow the same procedure with your car loan. Add a hundred a month or if you can double the payment. It’ll save you a lot just on the interest and free up income sooner versus later.
Establishing a budget lets you see exactly where your money is going. In the end, it will help you become a savvy shopper, spending only what you need to and enable you to enjoy a stress-free, well-deserved vacation yearly.