It’s never too late!!
We find debt everywhere in modern society. Whether it is business debt, government debt, or credit card debt, it seems to be the norm. Just because it has become so common, however, does not mean that it’s wise to overburden yourself with expenditures. Assembling and following a budget can play a crucial role when it comes to reducing your debt.
Putting together a household budget may not seem like the ideal way to spend a night, but it can pay off big dividends that make it  well worth it. A proper budget can help you pay down your debts more quickly. Once they’ve been eradicated, you can use that surplus cash to bolster savings or make some investments that will strengthen your financial position. More importantly, the peace of mind that comes from having a balanced budget is priceless.
Follow these steps to begin making a simple but effective budget:
- Open a new spreadsheet, word processing document, or grab a pencil and some paper. You can get a budget planning tool here: BUDGET ANALYZER -http://www.anewhorizon.org/pdf/TheBudgetAnalyzer.pdf
- Record your net monthly income, including wages and any other source of income.
- Itemize your necessary monthly expenses, including rent/mortgage, food, fuel, car payments, credit card payments and any creditor payments made to A New Horizon Credit Counseling, etc.
- Now list your discretionary expenses. This includes shopping, entertainment, and the like.
- Subtract all expenses from your income to view your net savings.
Making a budget is easy. Adjusting it can be more difficult. Your objective should be to increase either the net amount of your savings, or your monthly creditor payments, which will help you to pay down your debt faster.
Set a realistic goal for how much of your total expenses you’d like to free up. A good starting point may be 5%. To free this money up, try first to trim some fat from your entertainment budget.
- Cut out expensive dinners at restaurants.
- Bring your lunch to work.
- Rent movies instead of going to the movie theater.
- Cut back on expensive leisure activities. For example, if you like golf, use an inexpensive public course.
You can also reduce your monthly expenses by attacking your food and fuel budgets. While we’re certainly not suggesting you give up on food, try to be more aware of what you’re eating. |
Here are some more tips.
- Buy store brand versions of popular foods and clip coupons from the newspaper. Did you know that there are hundreds of online sites where you can download coupons for savings on national brands?
- If you like to shop online, search for special discount codes that you can enter at the checkout page for additional savings. They’re out there, just search for them.
- To reduce fuel consumption, make sure to maintain proper tire pressure in your car and keep your car in tune.
- Cut down on the number of car trips you make; a good way to do this is to plan all of your errands for one car trip rather than returning home only to go out again.
- Carpool to work if possible.
- Turn your home thermostat up 2 degrees in the summer and down 2 degrees in the winter. You will hardly notice the difference in comfort but you will see the savings.
- Switch from your expensive hair salon to the less expensive haircut chains.
- Use lay-a-way plans for purchases. Paying over time to the retailer without incurring interest beats credit card interest every time.
- Make all of your cost savings ideas a “Family Affair”. Multiplying the savings with everyone’s participation is the fastest way to save.
Once you’ve increased your net savings by the percentage you set as a goal, determine what to do with it. If you’ve got many outstanding debts like credit card debt, increase your monthly  payments to your creditors or to A New Horizon Credit Counseling. By doing so, you will pay off your creditors faster, thus reducing your debt even more. Alternatively, you can simply place the money in your bank account to build your savings, create a “rainy day fund”, or invest for your future.
Whichever option you choose, you’ll now have significantly more peace of mind… and that alone is invaluable!
Refer Friends and Family to ANH – We sincerely hope that you’ve found, and continue to find, the services of A New Horizon Credit Counseling to be helpful. Why not share it with the world? You can help your friends and family reduce their credit card debt, while receiving a thank you reward for the referral. For every friend or family member you refer (who remains in the credit counseling program for at least 3 months), you’ll earn $100. Call your counselor today to find out more about this program. Even if you are not a client, or are a former client, you can still participate in this rewards program by making the referral. |
