It's payday time. A lot of young professionals (yuppies) are on their trail to the nearest ATMs and they would sure look forward in a night out dinner with friends or do the usual night hops to bars and places of entertainment like a movies, shopping and others. After spending some on non-essential things they become guilty of losing their money in the end with debt from credit card companies and other IOUs with friends, relatives, your local loansharks even the legitimate lending companies around.
That's spells trouble alot for those who spend too much for nothing however only a few people know where they keep track of their weekly and monthly expenses in a regular basis which basically important in managing your finances in order not to overspend.
1. "I do not know where my money went" (Never Keep track of your spendings)
Solution: Track your spending and begin with a budget
A lot of people fear money management. This problem would definitely make a poor decision making and stop you from searching for that problem. It is better to face that fear and debt in order to get back to on track. It is better to track your budget by keeping your receipts and later track on your spendings and categorize in groups like for groceries, utilities, mortgage and emergency money and non-essentials.
Better to sit down, tally and categorize those expenses you incurred, a best example is to see your last month's worth of receipts including those that do not need receipt like buying some candy in a nearby sari-sari store counts as well. Keeping track of small and major expenses is highly recommended by putting it in a notebook.
Once you find extra cash, you can now save a portion and use the others for paying debts.
2. "I am maxed out with my Credit Card" (Credit Card debts rising).
Solution: Face on your creditors and negotiate
This fantastic plastic money is here to stay. We are faced with too much product advertisement of credit cards, with sales people littering around malls giving leaflets of credit card application and of course the cold calls they make during the early afternoons to mid-morning via their call center representatives. Some of our local big banks are offering credit card for free unless you are an account holder of their institution and having been banking with them for more than six months to a year. Back in my college days, lots of teenager can apply for a credit card through this major credit card firm and were in debt already in their young life.
Don't put yourself on situation that you hadn't paid up your credit card debt. Failing to pay your bills and ducking away from creditor's call can destroy your credit standing. Better to be straightforward than hiding yourself from them.
Contact your credit card companies - it is better to negotiate with your creditors tell them forward that you are unable to pay outright with money. Learn to haggle and tell them your lowest rates that can match with another credit card company. They sometimes accept a percentage of a full amount or help you set up a reasonable repayment.
Other things to remember on lessening your credit card debt:
3.) Do not take cash advances
Cash Advances - Instant cash indeed, they have the potency to make you get it but think a lot of time before receiving that money. Advances have sky-hight interest rates and service fees. In other word it is a expensive way to get cash. Better to slash those household expenses in order to prevent that short-term cash crisis.
4.) Don't miss payment dues
Credit Card companies pay a hefty fine on late payments, it is better to try paying online banking if you are beating the deadline. In short, being late on payments would definitely affect your credit score.
5.) Don't carry too much plastic on your wallet (too many credit cards would blow a hole in your pockets).
Having lots of credit cards is an easy way of piling those credit card debts. An instance, for example is a man who carry multiple credit cards wherein he pays the credit card A with credit card B. Better to control yourself on not misusing this tool.
It is better to limit your credit cards to two cards for easier money management. The first card is used for short-term purchases that you can pay-off in a month while the second card for major purchases.
6.) Don't make the minimum payments
This will stretch out your payments, with interest on hand, this will increase your overall cost on your purchase.
People think that "Credit Card is free money" but it is NOT. They do not know the concept of the credit card system, wherein you make a major purchase on that particular item through this credit card company and later pay it on before the due date or in a given time frame.
Save Smart, Spend Smart.
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