Managing How You Pay Your Bills At The End Of The Month
After paying your fixed monthly bills such as your housing or car payment, you may not know where most of your money has gone.
If you want to manage your finances especially your debts, draw out your spending patterns and classify every item that you spend in a month including the smallest items that cost even a dollar.
Separate the necessary from the unnecessary; the fixed or variable items.
Get your after tax income, then deduct all the expenses from your monthly income.
You may also sort and take the sum of all the variable expenses that you incur.
You may also consider some other way to increase your take-home pay.
Check whether you are getting a big tax refund every year - a result of too much withholding tax, if so, change your W-4 at work.
Make a separate list of all your debt and obligations plus the interest.
Rank them according to interest rate and put those with the highest rate on top ranking them list down to the lowest.
Then, it's time to begin unloading your obligations.
Let's call the portion of your net income your "bills fund" - to be used for paying all your monthly bills.
From this bills fund, set aside a bigger portion to pay for your credit card balance followed by at least a minimum amount due on all your other fixed expenses.
Also, take advantage of promo offering a low teaser rate and pay the balance before it expires.
Cutting down your debt is simply starting from the basics.
Reduce expenses on variable items - or things that you can live without.
The savings that you will get from this can be added up to your resources.
Then go back to your debt list and pay down the debt following your order of priority.
Usually your credit card balance incurs the highest interest rates.
Another option is transferring some of your high-interest credit-card balance to another card which charges a lower rate.
But be careful on what the fine prints indicate, for it might only be good for a specific period.
It could also pull down your credit score if your debt to available credit ratio gets bad.
Paying off debts could mean a little sacrifice.
You have to let go of your other small habits or luxuries which form part of your variable expenses.
Sometimes, it may not be enough.
Your next move may be reducing your utility bills.
Cut down your electricity or gas allowances.
Refinance your mortgage for a lower interest rate.
Those with better credit history may ask the credit-card company to lower the interest rate or have it restructured.
If you want to manage your finances especially your debts, draw out your spending patterns and classify every item that you spend in a month including the smallest items that cost even a dollar.
Separate the necessary from the unnecessary; the fixed or variable items.
Get your after tax income, then deduct all the expenses from your monthly income.
You may also sort and take the sum of all the variable expenses that you incur.
You may also consider some other way to increase your take-home pay.
Check whether you are getting a big tax refund every year - a result of too much withholding tax, if so, change your W-4 at work.
Make a separate list of all your debt and obligations plus the interest.
Rank them according to interest rate and put those with the highest rate on top ranking them list down to the lowest.
Then, it's time to begin unloading your obligations.
Let's call the portion of your net income your "bills fund" - to be used for paying all your monthly bills.
From this bills fund, set aside a bigger portion to pay for your credit card balance followed by at least a minimum amount due on all your other fixed expenses.
Also, take advantage of promo offering a low teaser rate and pay the balance before it expires.
Cutting down your debt is simply starting from the basics.
Reduce expenses on variable items - or things that you can live without.
The savings that you will get from this can be added up to your resources.
Then go back to your debt list and pay down the debt following your order of priority.
Usually your credit card balance incurs the highest interest rates.
Another option is transferring some of your high-interest credit-card balance to another card which charges a lower rate.
But be careful on what the fine prints indicate, for it might only be good for a specific period.
It could also pull down your credit score if your debt to available credit ratio gets bad.
Paying off debts could mean a little sacrifice.
You have to let go of your other small habits or luxuries which form part of your variable expenses.
Sometimes, it may not be enough.
Your next move may be reducing your utility bills.
Cut down your electricity or gas allowances.
Refinance your mortgage for a lower interest rate.
Those with better credit history may ask the credit-card company to lower the interest rate or have it restructured.