It seems just as you start to tread water with your finances something comes along to pull you back under.
Maybe you just received a pay reduction due to cutbacks and loss of work on your job, or you got seriously injured in an accident and lost a lot of time at work.
Whatever the reason for the new developing situation, coming up with the money needed to pay your bills can be difficult.
According to Los Angeles bankruptcy attorneys, debt can cause us to feel more than just financial hardship. Too much debt can affect our health, relationships, credit score, and more.
Getting Access to Credit
When you lose a portion of your income or lose it entirely, even for a short period of time, your bills can pile up fast.
Before you know it you’re receiving letters of default on your car or credit cards. Unfortunately, life isn’t fair.
Once you are late a month or two on your required payments, getting a loan to catch up through a traditional bank is nearly impossible.
Luckily, there are other institutions with less stringent guidelines for lending that provide bad credit personal loans. These will allow you to return to a current status with your debt and move forward.
Just make sure that you are able to work in the new payment so that you don’t default on this loan too.
Conserve Your Money
When funds are limited it’s important to become frugal and stretch every dollar. This means while you’re home and not working, you need to avoid unnecessary purchases such as coffee on-the-go, dining out and day spas.
The good news is that there are hundreds of ways to get more for less. First, learn how to shop smart.
Before going grocery shopping compile a list of everything you need for the week. Then, gather the store flyers and visit websites that provide printable coupons.
You may end up visiting a few stores in a single day, but the savings are well worth the time invested. At home, run your appliances like the washing machine, dryer, and dishwasher at night.
When you shower, cut it back by 5 minutes and turn the water off while brushing your teeth. You can also change your traditional incandescent light bulbs to LEDs.
Initially, they cost a bit more, but they last for years. Another money saver is to unplug unused appliances like can openers and coffee makers to eliminate ghost or phantom electricity costs.
Once you return to work or catch up from falling behind, it’s important to take the necessary steps to clean up your debt.
Establishing a budget isn’t enough. You must stick to it. Budgeting only works when you refrain from derailing it for no good reason.
Make a list of your debt and then your total net income. If the income is more, even just slightly, you can make a slow recovery and eventually free up money for personal enjoyment.
However, if you are not bringing in enough to cover your bills, you may need to take on a second job for the short-term.
If you have five credit cards, take the one with the highest interest rate and apply more to that one until it’s paid off and then move onto the next one.
Reducing your debt quickly will help you free up money you can use to open a savings account and do something fun like plan a vacation.
Life is unpredictable and because of this, it’s important to have a savings set aside to cover those times that will come along and upset your balance.
If you learn to live within your means, reduce your debt to income ratio and smart shop for everything, you will rise to the top and enjoy a financially sound life.