Tuesday, November 23, 2010

Personal finances management for when you are broke, debt consolidation home equity loans

It can be very difficult to budget when you are under financial stress. The following tips are aimed to us to budget when lacking a bit of cash.

Avoid getting evicted

It is very important to address immediate issues such as rental or mortgage payments.
if you are short on cash to pay for these bills then take a look at other bills you have to pay, such as electricity and mobile phone, and try to call the other companies and delay the payment of those bills in order to pay for your mortgage or rent.

Review your credit cards

Take a look at your credit cards and their due dates. A few months ago I was paying my credit card every time I got paid and I couldn’t figure out why I was short of cash before the next pay came. On top of that I couldn’t figure out why my credit card debt was not going down.

Turns out that I was putting too much cash into the credit cards and when I ran out of cash at the end of the pay period I used the credit cards again and the debt was never paid off and I was always running out of cash.

Now that was stupid. Take a look at the due dates of your credit cards and ensure that they are paid on time but, depending upon your circumstances you may be able to reschedule the dates you pay your credit cards in order to free up some cash for other obligations.

Just make sure you pay at least the minimum amount by the due date.

An couple of options to help you to pay off your credit card debt is debt consolidation and home equity loans.

With debt consolidation you can consolidate all of your unsecured debts into one payment that should be easier to afford.

If you have enough home equity you can also look at taking that equity out and use it to pay off your credit card debts. This is often a good idea because mortgage interest rates are much lower then credit card rates.

There are a few options to help you, do your research and take action.

Prioritise your bills

Take a look at you bills and prioritise them. Figure out which ones can be delayed to free up some cash for other obligations.

Call the companies you need to pay and negotiate with them. They prefer you talk to them and negotiate your payments rather than not paying your bills at all.

Ignore the 10% savings rule for now

If save money every pay check it may be a good idea to stop that for the time being and use the cash to pay for your bills. You will have to starve your piggy bank until you get back into the black.

Review your recent expenses

Use online banking and personal finances software to review your expenses in order to find places where you can cut. Tale a thorough look and don’t forget to include expenses you incurred using your credit cards.

Eliminate unnecessary expenses

Take a look at the list your compiled from the advice above and eliminate expenses that are not necessary.
I was able to save about $80 a week when I stopped buying lunch and coffee at work and start taking lunch from home. Food from home is also probably healthier from the one you buy so there are potential health benefits there as well.

Negotiate credit card interest rates

If you have good credit call your credit card companies and be honest with them. Say that you are struggling at the moment and try to negotiate lower interest rates for your cards. They prefer that you continue to be a customer rather than cancel your cards and transfer the balance to another company with lower rates.

Monitor your progress

Once you adjusted your bills and create your budget then monitor your progress. If you are really concerned about you may do this on a daily basis.

Take a close look at how you are tracking and adjust your plan as you go.

Make more money

If you are short on cash then the answer is actually simple. Make more money.

Many people review their finances, try to reduce their expenses but because of excessive debt they find difficult to meet all of their obligations.

Well the answer is painfully simple. Make more money.

Get an extra job, sell some of your stuff on eBay, work overtime or even seek a higher paying job.


I know by experience that living from pay check to pay check and juggling bills and credit card payments is very stressful. The answer is doing something about it. Take control of your finances and correct the situation.
Do something about it, your finances are not going to correct themselves.

Taking small steps can be the difference between financial disaster and financial success.

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