Using Credit Cards to Pay Off Debt?
Friday, February 12th, 2010 Subscribe To Our Feed
1/2 of the income but all the bills
A TV commercial for a debt consolidation company aired recently where one woman told us that her work hours got cut in half, but she cannot pay half her bills. The marketing behind this simply stated that, should your income be cut in half, you may be able to afford a lower payment if your debts were consolidated. With emergency cash being the exception, should an emergency arise, there’s really no reason to go into further debt in order to pay your bills on time. Paying bills with credit cards is not a wise move. Debt consolidation can help you lower your expenses by working with your creditors, but better results can be achieved by reducing your variable expenses.
Reduce your costs
To pay your bills without credit cards, the first thing you need to look at is how much money you are spending every month. Without honesty about this, you will not be able to get out of debt! This may include your entertainment and restaurant costs. This may also include credit card charges for too many purchases. A large house, fancy car, and all the amenities may cost too much for your current income. Budgeting often requires you to make hard choices on what to pay for and what to let go of. To avoid foreclosure, you need to look at selling your house with the high mortgage in favor of finding a lower mortgage payment. If you can only realistically pay less than $ 200 per month for a car, your $ 400 per month car payment will bring you further into debt very quickly.
Food does not have to be expensive, so look at where you can cut costs here, as well as on your housing and transportation. Once you have done this and created a budget, you must put your budget into action. Take action on your plan to lower your bills.
Debt Repayment Plan
With the massive credit card hikes that have been charged to many people lately, it is imperative that you pay off your credit card debt as soon as possible. Don’t wait to pay off these balances, because you will lose more money from interest rates in the long term. To get out of debt quickly, you must create a debt repayment plan. A proper debt repayment plan includes cutting up your credit cards. You not need credit cards to survive on, even if experts tell you otherwise. If you create a sensible budget, you can live within your means. Credit cards may be able to help you in an emergency, but a sensible budget works better in the long term. Saving eight months’ of income should be a top priority to help cushion you against an emergency. When time is not an issue, you may be able to get an emergency cash loan to help you through your emergency.
Increase Your Income
No budget worth its salt is complete without a plan to increase your monthly income. Putting a plan in place in case your income is reduced by half can help you pay your bills on time and keep you out of hot water. Generally, even in the recession, you can find something to do that someone else will pay you for. Your talents can actually help you earn extra money. Babysitting, party planning, or even organizing can all contribute to your income, even during a recession. As a writer, if you can explain difficult concepts, you can make extra money to take care of the shortfall from a cut in income. Making up for lost income requires you to evaluate your talents, as well as your skills. Turning a hobby into a business may eventually replace your income from your job.
Smooth Sailing
After creating and implementing your sensible budget, you will wonder how you ever lived with credit card debt in the first place! A budget will be worth nothing if you do not make the effort to implement even the small changes. Long term budgeting will provide space for emergency cash loans!
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