Debt Reduction, Doing a funny dance called the budget balancing act.
Filed under: Debt Control — Jean @ 11:09 am
Budget balancing means taking responsibility for your finances, living within (or maybe below) your means and coming out of it with your sanity intact. Here are some tips for living the budget balancing act and coming out in front. Putting your budget into numbers makes it more real.
We can make the mistake of thinking of our budget in abstract terms. “We’re on a budget,” you might tell a friend who asks you to go along with her on vacation, or to an expensive show. Some of us are on a “budget.” But what does it really mean? Take your budget out of abstract terms and make it real. Sit down and do the math, as hard as it can be. Most of us avoid taking a good long look at our finances because it can be too hard, especially if we suspect we are deep in the red. It’s time to take control, and taking control means having the courage to sit down and take a good look at your finances. Take out your bills. Are you in debt, and if so, how much? Be honest and don’t overlook any accounts. Lying to yourself about debt is not helpful or necessary. If you are not in debt, but perilously close, figure out why. Most numbers don’t lie. Are you spending too much on housing? Is that extra car payment eating away at your budget? Are your child care costs soaring? Know your budget inside out-what you can and can’t afford, how you pay for things, your debt and credit score, and savings.
If keeping a log book sounds too technical for you, just think of it as a notebook where you keep your records. Make a note of your earnings, saving, debt and purchases. Think of your log book as a place where you can do your math. Your log book should be private and a place where you feel free to jot down notes, calculate interest rates and keep financial notes to yourself.
Almost every bank in the world now allows its customers to keep an online account. So If you haven’t already, set up your account. This is an easy way to manage your accounts, check balances and make payments online with an automatic bill payment. This is an easy way to make sure that your payments are always made on time.
Debit cards are a convenient and safe way to pay for everyday purchases. They can also be very dangerous if you are on a strict budget and you are trying to save. If you are serious about saving money, forgo your debit card for a while. When you have organized a good solid budget, on pay day, head to your local bank or ATM machine. Withdraw enough cash to make necessary purchases and then tuck your debit card away somewhere safe. This is a surefire way to stick to your budget.
If you have credit card debt, check there interest, you must know how much you are paying in interest? Especially if you are juggling several accounts, it can be easy to forget or overlook interest rates. How much exactly are you paying on each transaction? Check with your credit card for this information. If you have long-standing accounts in good standing, try to negotiate a lower interest rate.
So are you living the Budget Balancing Act and are you Coming out Ahead?
ebook on How to Set Up a Family Budget
More Information on Eliminating Debt