budget | Debt Management Credit Counseling Corp.

Ways People Waste Money

December 8, 2022September 14, 2013 by Aldo Gonzalez

Wasting money is not only detrimental to your overall financial well being, it’s irresponsible. Your house and living expenses make up the major portion of your personal budgeting plan. If you are not careful, they will leave you with little or no money to build financial security, or play with. Just like spending cash unnecessarily, paying for home expenses that are unnecessary is just wasting money. Here are some ways people waste money on household expenses.

Paying for the same service twice.

Most households subscribe to cable T.V. A good portion of cable subscribers also pay additional money for one or more movie channels. It’s not unusual for these same families to rent movies from video stores and/or subscribe to a movie service via mail. In this scenario, there are now three resources included in the household budget for movie viewing entertainment. Which, by the way, is technically a discretionary expense, not even a necessary expense.

You can save by trimming down this expense to one good service that best meets your family’s movie entertainment needs. List and analyze your movie viewing options. Determine which service gives you the most benefit for your money. Then, make an informed decision on which service to keep. Reducing this household expense could save hundreds of dollars per year.

Paying for services that you don’t use or really don’t need.

This is most common with home phone services. Features like call waiting, caller ID, return call service, long distance packages, etc, etc, etc. are extra expenses that you could possibly live without. Is the convenience of caller ID worth a fee of nearly $8 per month? Do you really need it? Eliminating little money leaks like this adds up to significant yearly budget savings. Review all of your household expense bills to see if you’re paying extra for services you don’t need. Eliminate extra services and the fees that go with them whenever possible.

Sometimes making lifestyle changes can reduce expenses significantly. You can minimize costs on essential household expenses by simply being more aware. During Summer months, don’t turn on the air conditioner until you can’t take it anymore. Not using the air conditioner will save the most on home energy expenses. Many gas and electric providers offer energy efficiency evaluations for your house, free of charge. Take advantage of this service to see where you can make home improvements that could mean substantial savings in energy costs. They may also offer suggestions for lifestyle changes that can reduce energy expenses even further. During winter months lower your thermostat a few degrees and dress warmer if necessary.

Review, remove, and reduce expenses to stop wasting money and trim your household budget. Analyze each household expense for necessity and the costs associated with it. Make an effort to reduce each expense to the minimum amount possible, while still meeting your family’s needs. Before you know it you’ll be saving hundreds, if not thousands, of dollars on your household budget expenses each year.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt. Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email contact@dmcconline.org.

Use Budgeting To Reduce Debt

December 8, 2022September 13, 2013 by Aldo Gonzalez

Many Americans live their daily lives without a budget, possibly why the average American household is over $8,000 in credit card debt. People in these difficult financial situations often say that the reason they have fallen upon hard times is because they do not make enough money. More money does not always solve the problem; more money often leads to more problems. The real solution to financial problems is planning, or budgeting.

With a little knowledge and effort, anyone can begin creating a budget to reduce their overall debt.

First, stop adding debt upon debt. It’s of the upmost importance that you quit accruing debt immediately. Use cash for your purchases, not your credit cards. If you can’t pay cash, you don’t buy it. Period.

Next, figure out how much you pay per month total for all of your expenses. This includes rent/mortgage, car payments, car/home insurance, utilities, credit card debt, other personal loan debt, food, gas, Internet, cable television, clothes, eating out, and entertainment – everything.

Now, determine your total income. Subtract this total from your monthly income total. Where do you stand? Are you comfortably in the positive, or barely? Or are you in the negative?

If you’re barely in the positive, or if you’re in the negative, it’s time to reduce your overall expenses.

What can you get rid of? Eliminate extraneous expenses. Also, shop around for better telephone rates, cell phone rates, and insurance rates. Make changes where you can.

Phone your credit card companies and try to get your interest rates reduced; sometimes they’re even willing to negate past due and over the limit fees. Consider contacting a non-profit credit counseling company. Debt consolidation or debt settlement might be a consideration for your situation. Your goal here is to reduce your overall debt from your credit lenders.

If you shift your focus from short term to a long term point of view, you will find that you will eliminate many of your wasteful spending habits. Furthermore, you may find that you are saving money for a rainy day, possibly even investing. Once your financial maturity reaches this point, you will no longer fall prey to life’s unexpected expenses. This is the only way to reach financial independence.

Reduce Debt By Taking Charge

December 8, 2022August 20, 2013 by Aldo Gonzalez

Getting out of debt and staying out of debt is not easy. If you’ve already amassed a fair amount of debt and are thinking it will be impossible to ever get out from under it all, don’t despair, you can learn how to stop incurring new debt and take charge of your life.

The first thing you must do is STOP increasing your debt! If you have any credit cards that are maxed out, destroy them. The best way to manage your debt is to get spending under control by eliminating all of your credit cards, except one. Use your one credit card ONLY to buy “must haves” until you can get your finances in check.

Avoiding more debt starts with knowing what you are spending your money on. Record your spending. This is key to getting out of debt. You’re in debt because you spent money you didn’t have. If you’re like most people, your debt didn’t come from a single large purchase; it was trickles of spending amassed over time. Each day for at least one month, write down every penny you spend, no matter how small.

The next step is to categorize your spending. Put your monthly expenses into groups of “Must have,” “Should have,” and “Like to have.” “Must haves” are things that will cause harm if you don’t buy them, such as food, rent, medicine, pet food, etc. “Should haves” are things that you need, but can do without for a little while, e.g., new clothes for work, gym membership, etc. “Like to haves” are things that you don’t need, but enhance your life, e.g., magazine subscriptions, newspaper, cable tv, coffee with friends, etc. By doing this, you’ll have a good idea of what you spend your money on, and you’ll be able to figure out where you might need to cut back on spending. You don’t want to eliminate all of the “should haves” and the “like to haves,” but take a look at those first.

Now, make a budget based on your spending record. Looking at your new budget, you’re going to be able to see areas where you might be able to cut back. Chances are, your budget has some fat that can be trimmed. Be realistic, but vigilant. Over time you will be able to hold back on purchases and you will be able to come up with a dollar amount that can be put toward paying down your debt.

To begin paying off your debt, first figure out how much you owe, to whom, and on what terms. Debt can often feel overwhelming because you really don’t have a clear idea of how much in debt you really are. Gather your bills, and make a simple list of all the debts you have. Write down all the pertinent facts, including name of the creditor, your total balance, your minimum monthly payment, and your interest rate.

Prioritize your debts. Debts that are past due, ones where the creditors are hounding you, and those with exceedingly high interest rates should be considered top priorities. You should pay the minimum on your low interest rate debts, and apply the bulk of your available funds to the highest interest rate notes. Once you pay off one creditor, each debt gets easier to pay off than the last. Continue to pay off each debt in your priority list. You’ll refine your budget over time, increase the amount of money you can pay yourself, and the amount you can put toward debt.

Once things become more manageable, make sure you always pay more than the minimum required, otherwise it will take an extremely long time to eliminate your debt. For example, a single credit card with just a $1,000 balance and 19% interest will take about FIVE YEARS to pay off by making only the minimum payment of $26. Paying the minimum, you will spend $1556.40, with the Total Interest Paid: $556.40! Paying only the minimum payment will equate to giving them 55% more than you actually borrowed.

Don’t give up. You probably didn’t get into debt in a day, and you won’t get out of debt in a day. There are no quick fixes. Consider contacting a credit counseling agency to consolidate or settle your debts. Learning how to manage your money can bring great peace into your life, and will give you the freedom to spend your energy on other things.

Start Fresh After Bankruptcy

December 8, 2022August 4, 2013 by Aldo Gonzalez

Getting back on your feet following bankruptcy can be a very difficult task. You’ll be starting from scratch. It’s critical to your future financial success to make sure you don’t make the same mistakes .

To ensure you make a “fresh” start, you need to think and analyze your previous spending habits. What really lead you to go bankrupt? Analyze your expenses, the way you handle your money and of course your lifestyle. Do you have to live a lavish lifestyle? And the major question is can you afford that kind of living? What are your major purchases recently? Asses your situation, and the causes that made you experience bankruptcy.

After that, make a plan on how recover and live without going into a financial difficulty. The primary thing that you have to do is to reestablish your credibility, especially to financial institutions. You must regain a good financial standing status. Start to build up resources. Save your money and put it to good use. Don’t splurge on extravagant items. Keep in mind what drove you to bankruptcy, your too much spending attitude. You have to change the way you regard your expenses.

If you use a credit card, be sure to pay on time, in full. Make sure also that when using credit cards, it’s for emergency purposes and not for luxurious items. Keep only one or two credit cards. A lot of credit cards may lead to temptation. You don’t want to end up into the same situation again. Having a savings account is also a good option because it means less reliance on your credit card purchases. You’ll learn how to set aside cash in your account for large purchases.

Budgeting is also very important because it teaches you on how to manage your money. Stick to your budget!.

Some lenders are willing to offer housing loans to people who have declared bankruptcy. If you find a financial company to hold your home mortgage, make sure you pay them promptly. Prove to them that you’re worth their risk.

Bankruptcy can bring stress to your life, but there is a lesson to be learned. You’ll know now how to deal with your monthly expenditures. Your spending habits will change for the better and you’ll live a life without worries. Keep in mind, it’s fine to have debts as long as you know how to manage your resources and pay your creditors.

Teach Children Early About Money

December 8, 2022June 8, 2013 by Aldo Gonzalez

Just as with many other life lessons you will teach your kids, it is important to instill sound money management principles in children. As you attempt to instill other good habits in your youth, do not ignore a vital ingredient: financial awareness. Many children grow to adulthood, lacking the skills and ability to handle money. This can lead to years of unhappiness and hardship.

When teaching your children about money, begin early. The sooner your children develop awareness, the better they will understand the realities of the financial world.

It should go without saying, but your best bet is to lead by example, practice what you preach. You must display financial soundness. Whether you realize it or not, your children pay close attention to what you say and do. Chances are they will model their behavior after yours.

Save gift-giving for special occasions. Though generosity may seem like a good quality, dumping extra money into their hands, without adherence to a budget, can send mixed messages.

Allow children to control their own discretionary spending. If a child is to learn about money, he or she must sense some meaningful connection to it. Though the parents should advise their kids on sensible spending and saving, they should not dictate how their offspring handle their earnings. The decision should be theirs, on how money received is to be spent, or saved.

If there’s one common mistake when it comes to raising financially responsible children, it is an inability of many parents to properly regulate their own financial lives. Prior to the age of about twelve the average child lacks exposure to finances, except for whatever involvement the parent or guardian generates. Regardless of your own current situation, the way you handle your finances is critical in securing the future financial success of your children.