Monday, January 25, 2010

Using Credit Cards to Pay Off Debt?

Half the Income But All the Bills

A TV commercial for a debt consolidation company aired recently where one woman told us that her work hours got cut in half, but she cannot pay half her bills. They were really wanting you to consolidate your debts into a lower payment in case your income gets drastically cut. When emergencies arise, emergency cash loans do not need to push you further into debt if you are not paying your bills on credit. Credit cards should not be used to pay your bills either. If you were to go to a debt consolidation company, could you really get the same results as you could if you reduced your expenses.

Reduce Expenses

To pay your bills without credit cards, the first thing you need to look at is how much money you are spending every month. Complete and utter honesty must be used! This may include your entertainment and restaurant costs. Over spending may be a problem, which is why you may be needing to pay bill with credit cards in the first place. A lower standard of living does not have to mean you live in sub standard housing or eat Ramen noodles for every meal. Smart budgeting requires you to make some hard choices of what expenses will stay and go. A large house may be nice, but if you cannot afford it, you need to make the hard choice to sell it. A car payment of $ 400 per month may be more than you can afford, so you must sell the car.

Housing, food and transportation costs are the biggest expenses in your budget, and should be planned for accordingly. If a budget is balanced on paper, it will not work if you do not take action immediately. The most difficult step in lowering your bills is to get started.

Debt Repayment Plan

With the massive credit card hikes that have been charged to many people lately, it is imperative that you pay off your credit card debt as soon as possible. Save yourself the headache from the credit card interest rate hikes and pay off your balance now. If you do not want to spend the rest of your life under a mountain of debts, create a debt repayment plan. Get rid of your cards, so that you can be clear to create a debt repayment plan. People may say that credit cards are a necessary evil, but they are not necessary at all. Instead, you can live within your means if you take the time to create a sensible budget. What if you have an emergency that a credit card could take care of. A large amount of savings should be set aside to assist you in any emergency. When time is not an issue, you may be able to get an emergency cash loan to help you through your emergency.

Increase Your Income

No budget worth its salt is complete without a plan to increase your monthly income. If you lost income from your job, or even half of your household income, how are you going to replace it. A recession proof skill will allow you to make money from others who will be willing to pay you for the value you will provide. Look at your talents—do you do something so well that others would pay you to do it for them. Picking up some extra jobs, such as babysitting or organizing may help you earn more money. As a writer, if you can explain difficult concepts, you can make extra money to take care of the shortfall from a cut in income. Your talents are your biggest asset, so take a good look at these. Your skills may eventually land you into a new full time job, which could replace your income.

Smooth Sailing

After creating and implementing your sensible budget, you will wonder how you ever lived with credit card debt in the first place! Simple changes to your budget will take some effort on your part to make it work, but it will work eventually. Long term budgeting will provide space for emergency cash loans!

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