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Budgeting when you need debt help

If you find yourself in need of debt help and are struggling to make ends meet, it’s likely that your budget (or lack thereof) doesn’t reflect your earnings.

Budgeting can prevent getting kicked out of your house, increased debt as well as ruining your credit profile. It’s never too late to start working towards your financial goals.

Use these Budget Tips for when you need debt help to make life a little bit less stressful.

Ask for an extension and avoid short-term disasters

If you are really strapped for cash, don’t be scared about asking for extensions. Most of these requests are granted, especially if you actively put a plan into place to pay back the money you owe.

For example, if you are worried about losing your apartment because you are short on the rent, talk to your landlord. If your rent is R4000, but you only have R1500 ask your landlord about paying the small amount and tell him or her when you plan on paying back the rest. Alternatively, you could try and get an extension on other bills like your ADSL, cellphone and store card bills, and use the money to pay your rent in full.

Check your credit card payments and their due dates

As you have probably heard, paying the minimum amount due on your credit card will get you nowhere. So just imagine where not paying anything at all will get you.

Not paying your credit card at all will make your situation even worse because of late fee charges and interest. Say the balance on your credit card is R1000 and your minimum payment is R140, which you fail to pay, you will be charged a late fee. Soon your payment could double and that’s not even taking into account the next payment.

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Late fees, interest, missed payments; it could all get very ugly very quickly. If you are really struggling, ask your credit provider to help you extend the payment period and make an arrangement to pay what you can.

Take stock of your spending

To get started with a budget, you first have to know where your money is actually going. Chances are, if you are left with no money at the end of the month, you don’t know where most of it is going.

Get a bank statement going back three months and account for where all your money is going. If you use your debit card for most things, this will be a seemingly easier task.

For the next few months, keep slips for all your expenses and see where you can save and where you are wasting money. It is also a good idea to get a money journal for the coming months and write down every single time you spend money.

Adjust your expenses and seek other income opportunities

You might need to cut down on things like internet, DSTV and other luxuries, but just for a few months. You have to be tough and ruthless.

Also remember to get a comparative insurance quote and a medical aid quote to make sure you aren’t paying too much. If you still come up short, you might need to think about a second source of income. There are many odd jobs and freelance jobs out there which you can do to help supplement your income.

This article is powered by Justmoney.

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