We can "live for today and pay for it tomorrow" too easily these days. Most adults have some kind of credit line and pay for things with money they've borrowed. Perhaps the most worrying thing is that "if we want it today, we have it today" is becoming more and more of a social norm.
Many of us probably try to "keep up with the Joneses," but problems can happen when we don't earn as much as others.
Most people will be able to tell you how much money they make each month if you ask them. But if you ask them how much they spend each month, many of them will give you a blank look because they don't know how much they spend each month.
Many people spend a lot more than they earn, and because credit card companies compete so hard for customers, many of us are tempted to get two, three, or even more than five credit cards and use them all at the same time. Also, many people only make the minimum payment each month, and since interest rates on credit cards are high, the balance tends to just keep going up each month.
Because of this, it shouldn't come as a surprise that something has to give at some point, since our debts keep getting bigger while our incomes stay the same.
If you can relate to some of the problems above, there are several things you should do.
First of all, don't use credit cards!!! It can be hard to admit that your spending has gotten out of hand, but sooner is better than later. If you wait too long, you might not be able to stop creditors from bothering you, so cut up your credit cards now.
If your credit card and store card bills and other debts are getting out of hand, a loan to pay off your debts can be a real blessing. It lets you pay off all of your debts at once, leaving you with one affordable monthly payment due on the same day each month. The interest rate will be lower than what you pay on your credit cards, and you'll be able to better plan your budget.
And since we're talking about budgets, you need to make one and stick to it, no matter how hard it is.
Put all of your income sources in one column and all of your expenses in another. Add everything that comes to mind. Once you've added up both columns, you'll need to cut your spending column until it's the same size as or smaller than your income column. Expensive cars, luxury vacations, and even going out for Chinese food once a week may have to go. On the other hand, you might want to look into ways to make more money. No matter what you do, your costs can't be more than your income.
If you update your budget often and get a consolidation loan, you'll soon see how good money management can help you stay in the black and out of the red.
