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what to do when bills take over your life

By Lena / July 30, 2012

What to Do When Bills Take Over Your Life

Getting control of your personal finances is always important, but in light of our present unstable economy, it is absolutely crucial. To avoid the never-ending crunch of monthly bills and to reduce your anxiety about the future, try some of these suggestions to better equip you for whatever may come!

Start getting control of your finances by tracking your spending. Get a notebook or start a spreadsheet and keep track of every penny you spend throughout one month. Keep every receipt as well. It may be easier to categorize expenditures such as living expenses, loans, etc. At the end of the month, you should be able to see patterns that you can adjust and needless purchases that can be eliminated. You may even find that you have more money than you suspected!

It is vital that everyone open an emergency savings account. You can get a free account through your bank and keep it separate from your other savings. Commit to depositing into this account each time you get paid, and in an emergency, you won’t be scrambling or using money alloted for groceries to pay for a new set of tires for the car!

Shop around for a bank that offers free checking and savings accounts. Be certain to ask about any hidden fees, such as ATM fees, or fees charged for not keeping a certain balance in your account. Extra bank fees can add up to hundred dollars per year in some cases!

You probably don’t need to hear this again, but pay down all credit card debt! If you are paying minimum payments, you are most likely just covering the monthly finance charge, and paying nothing toward the principal balance. If you cannot pay them off, add some extra when you can and designate that it is to be applied to the principal balance. You can also lower your interest rate by negotiating with creditors or transferring balances to a new, lower-interest card.

If you must use a credit card, do so only if you can pay it off each month. You will avoid costly finance charges and the risk of getting into debt. Using a credit card properly is also a great way to build good credit, as creditors will see that you handle credit well.

Cut costs wherever you can. Can you bring home-brewed coffee to work instead of that five-dollar latte? Could you carpool to work with someone in order to save on gas? How about using coupons to save on the grocery bill? There are so many ways to save money with just a little creative thinking!

Finally, find good motivators to help you save. Of course, a stress-free future is the best motivator, but small rewards can make saving much less painful. Plan a week-end getaway every few months or do something for your home that will help you save more, like planting a garden. This way, saving can become more fun and less of a chore!

This article has shown you several ways you can improve your financial situation. They are simple to follow if you set your mind to it and visualize the rewards. Now, find some of your own money-saving techniques in addition to these, and your finances will be in better shape and your future will be a whole lot brighter!

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Lena

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