• Expenses

    How to Save on Expenses When You Are Trying to Repay Your Debts

    Dealing with a lot of debts can be a nightmare, especially when repaying them means spending more than half of your income. In some cases, you may be looking at debt repayment accounting for 70% (or more) of your expenses; this is a sign of a debt problem to solve.

    Facing a debt problem is not something to be embarrassed about. Millions of people are in the same boat, especially with the economy being as unpredictable as it is today. What you don’t want to do is ignoring the issue or not doing anything about it.

    In fact, doing something about your debt problem is a lot easier than you think. You have programs, aids, and even financing options to help you repay your debts and return to a healthy cash flow. One of the ways to do it is by cutting expenses and allocating the funds towards faster debt repayment.

    Start with the Loans

    The best way to start reducing your expenses is by looking into the debts themselves. Some debts are more expensive than the others. You also have different repayment amounts and due dates to deal with. Fortunately, there are many things you can do about your debts.

    Consolidating multiple debts – especially credit card bills – into one affordable loan is an option worth considering. You save on interest and other charges while making the entire loan repayment process more manageable. It is certainly easier to keep up with one monthly payment than ten. Lenders such as Emu.co.uk can help with this.

    You should also prioritize the debts you need to repay, especially when you cannot consolidate all of them. Start with the smallest ones first, since repaying them lets you allocate the money towards other debts you still need to repay.

    Make a List

    Impulsive spending is your biggest enemy when you are trying to repay a series of debts. You simply don’t have the luxury of making spontaneous purchases just because there is a sale or a special offer. What you need to do instead is writing down the essential items that you need to buy before going out to the shops.

    Write down all of your expenses too, including the small ones. This is a good habit to get into. It allows you to review your expenses at the end of the month. More importantly, it allows you to find more ways to save money for debt repayment.

    Stick to a Budget

    There is another benefit of writing down your expenses, and that is the ability to create a monthly budget. Now that you know the expenses you absolutely need, you can create a more accurate monthly budget to follow.

    Allocate portions of your income towards different expenses and use the rest to repay your debts based on the priority list we discussed earlier. By sticking to a budget, you can also continue trimming your expenses until you can allocate a sufficient amount towards repaying your debts.

    Use Coupons and Special Offers

    When you have debts to pay, there is no amount too small to save. A 5% discount here and a £2 reduction there will eventually add up to a substantial amount. Even better, you now have more special offers and coupons to use on everyday purchases.

    You can still rely on coupons in newspapers and carton boxes, but technology is an even greater friend when you are trying to save. There are apps and websites that grant you access to a wealth of coupons to use both online and offline.

    Special offers are easy to find too. Similar to coupons, you can search for special offers based on location, the products you need, and other parameters. Sign up for newsletters and you can even find exclusive deals that let you save more on everyday purchases.

    Buy in Bulk

    Another fantastic way to save is by buying in bulk. Rather than going to the grocery store every week, you can save more money by going straight to the wholesaler. In fact, most of the everyday items you use are best purchased in bulk.

    Expect to save anywhere from 10% to 50% when you buy certain items in large quantities. Plan ahead for the entire month and you’ll find an endless array of ways to save. Yes, you can still use coupons on your bulk purchases.

    Buying in bulk also comes with added benefits. Since you don’t have to go to the shops often, you save on petrol and travel expenses. You are also less likely to make impulse purchases and sticking to your shopping list becomes easier.

    Be Patient

    I know how frustrating trying to repay your debts can be. That frustration usually leads to more stress, and stress leads to unnecessary expenses. Again, you are not alone.

    Be patient. Allocate more towards repaying one debt, and then use the extra money to repay the second, and then the third. Keep saving money and you will find the rest of your debts to be easier to repay than before. 

  • Credit Cards

    A Guide to Paying Off Credit Card Debts

    Credit cards are great for a number of reasons. You can manage your expenses better, maintain a healthy cash flow, and even earn rewards on your purchases when they are made using credit cards. You also benefit from loyalty programs and special offers available to credit card holder, which means you can actually save more money in the long run.

    That said, a lot of people suffer from bad credit card debts due to misuse and mismanagement. When you have too many credit cards to pay, repaying them on time can be a problem. This usually leads to late charges and bigger interest. Before long, you have serious credit card debt issues that aren’t as easy to solve.

    If these problems sound familiar, you are not alone. Thousands of people in the country suffer from bad credit card debts and the issues that come with them. What you need to do is taking steps to pay off your credit cards.

    1. Understand the Situation

    There are two things you need to do before you can start solving your credit card problems. First, you have to acknowledge that you have a problem to solve. There is no point in denying the issue; in fact, you will only make the problem worse without tackling it head on and doing it quickly.

    Next, you need to understand the situation. This means making a list of all credit card bills you have to pay, the interest they charge, fees and other costs associated with every credit card you have, and the total amount you need to pay to get the credit card debts settled.

    These two steps are crucial if you want to pay off your credit card debts. At this point, you know exactly the kind of problems you deal with. Finding ways to solve those issues becomes easier when you know the problems inside out.

    2. Prioritize

    With a list of your credit card debts in hand, it is time to work on prioritizing those debts. There are several ways to do this, but the best way to go is paying off the smallest ones first and then continuing with the bigger ones.

    By paying off the smaller credit card bills, you are essentially freeing up money to allocate later. Once the smaller ones are paid off, you can reallocate the money towards bigger debts. You are basically building momentum that leads to all of your credit card debts settled.

    Once you know which ones to pay first, get in touch with the credit card companies and start negotiating better deals. Acknowledge that you are trying to solve your credit card issues and that you need help getting a more realistic repayment plan.

    3. Consolidate

    Juggling multiple credit card bills isn’t always easy and negotiating a more reasonable settlement plan is not always possible either. If this is the situation you face, there are other options to consider. One of them is consolidating your credit card debts using a personal or consolidation loan.

    Rather than dealing with multiple – and expensive – debts, you can convert all of your credit card debts into a single loan with lower interest. Consolidating your credit card debts also means repaying them all at once, which means you have more leverage to negotiate a suitable deal.

    Once the credit card debts are repaid and consolidated, close them immediately. Don’t even think about keeping the credit cards for later use. You can keep one credit card that gives you the most rewards and added benefits, but the rest must be closed immediately.

    4. Work on Your Expenses

    You may need to raise more money to regain control over your cash flow. There are two ways you can do this: find new sources of income and trim your expenses. The latter is obviously easier; after all, you are already in control over your expenses.

    Start with the least important expenses. This includes the cup of coffee you buy on your way to work and the magazine subscription you don’t necessarily need. Cable TV, dining out, and other non-essential expenses must go too.

    Continue trimming your expenses and you will have more money to allocate towards repaying your credit card debts. The more you do it, the sooner you can settle your debts and regain control over your personal finance.

    5. Stick to the Plan

    Lastly, make sure you stay true to your repayment plan no matter what. With a bit of consistency, you can get out of a seemingly bad credit card debt problem in as little as 12 months. You just have to be willing to make some sacrifices along the way.

    Don’t worry; you can return to enjoying a nice cup of coffee every morning and subscribing to both Netflix and Amazon Prime once the credit cards are repaid. You can also choose to continue saving and start investing towards a better financial future. The choice is yours.