When you’re having trouble with debt, the sound of the phone ringing can strike feelings of terror. Is it your friend calling, or another collection agency? While we can help you get some breathing room to avoid creditor calls, creating and sticking with a budget is a must to keep your financial house in order.
When developing your household budget, keep these five things in mind.
Always Learn from History
The best predictor of your future spending needs is your past spending history. Your online banking statements should go back at least six months, and that’s a great way to see where your money has been going. It may come as a shock to see how it adds up, but it will certainly explain a lot!
Don’t Reinvent the Wheel
You could try to develop your own template to track your household budget, but why? There are many free budgeting templates available online that are very easy to use. As an added bonus, there may be line items in the online template that you would never consider when developing a budget on your own.
Leave a Little Room
Be sure to leave a little wiggle room, ideally about 10-15%, for unexpected increases in bills. You don’t want to have to go without using the air conditioner on a really hot day to stay on budget! If that’s too much of a cushion for now, start with a smaller percentage and work your way up as your monthly debt payments shrink over time.
Write Everything Down
Make sure every expenditure is written down, especially when you’re just getting the hang of sticking to a new budget. The psychological effect of having to hold yourself accountable for every purchase just may be the incentive you need to put an unnecessary item back when you’re out and about.
Cash Only, Please!
You might not be able to go without credit cards completely, but leaving them at home will help you stay within your budget. It’s a lot harder to make an impulse purchase when it means you have to go home to get your credit card first.
If you call us today, we can help you get out of debt. However, staying out of debt is up to you!