If you’ve had a bad couple of months or even a few years in terms of finances, you know all too well how it affects your ability to purchase anything from a new car to an insurance.
If you’re ready to end the cycle, restore your credit and gain back the freedom to get the best rates possible, now is a great time to start getting back on track with your finances.
Finding ways to cope while transitioning
Digging out of the hole that consists of high debt and poor credit takes time. In the meantime, there are ways to acquire the things you need and get the best rates out there for you. Take for instance car insurance.
If you’ve had an accident or missed a few payments and now can only get insurance through a company that offers high-risk insurance, shop around first. Get an insurance quote from several companies and find the one that best suits your needs. This way while you’re restoring your credit you’ll still pay the least amount possible.
Restoring your credit
Having a low credit score can add hundreds of dollars or pounds each month to an already tight budget. Even if you think there’s no way to reduce your overhead and free up monies to pay down your debt, with a change of mindset and a plan in place it is possible.
The first thing you need to do is create a spreadsheet. This is where you’ll list all your bills, everything from your rent or mortgage to your food shopping. Once you have that on paper you’ll have a clear picture of what you owe out.
If you have several credit cards, double up on the one that has the highest interest rate first and pay just the minimum payment due on the rest. Once you pay that one off you’ll move onto the next one. This will help you to owe less each month and work to improve your credit score.
Learn to pay cash
If you use your credit cards to live, it’s only a matter of time before you max them out and then the source you’ve grown to count on is no longer available. This now hurts you in two ways. First, your additional source of cash is gone and second, you now have a lower credit score.
Credit cards should never become something that you factor into your monthly income. You should only use credit cards for emergencies or for a holiday to earn points and then when you return home you pay the bill off. It’s time to end the cycle and start using only your cash to make purchases. The first month will probably be tight, but after you do away with pulling the card out of your wallet, it will get easier.
Doing this will also give you a true accounting of what and where you spend your money on. It will also stop you from making frivolous purchases, which means putting more cash back in your pocket, which will really add up over time.
focus your energy on finding ways to save your money
Working through a tough time in your life can cause daily stress. You can get through this rough patch by using every means to save money. This means going food shopping with a list in hand and sticking to it. Before heading out to the store you should also check online to see if there are any coupons available for the things you need.
If you purchase a coffee each morning, limit it to once a week. The same goes for eating out, reduce it to once a month. You can also contact your cable service provider and change your service to basic for a few months.
There are so many ways to free up monies each month to pay down your debt and finally get to a point where you actually have money left over, it’s really just a matter of picking the ones that work for you.