Struggling with money after Christmas? You’re not alone, this is the time of year where just about everyone is tightening the belt and being more careful with what they’re spending. Here are some of the ways you can quickly get your finances back on track.
Get out of debt
The problem with debt is that its very easy to get into, but extremely difficult to get out of. Many of us find ourselves in some form of debt or another at some point in our lives, while no-one sets out with the intention of getting in debt, these things can spiral quite quickly. The problem with most debts is they can act like shackles, and you are at the mercy of your creditors, if something changes and you’re not able to meet your payment commitment any more, you can find yourself in quite a scary situation where you’re being harassed for payments. If you have savings and debts at the same time, you’re doing it wrong. Due to the interest that accumulates on debts, it works out much cheaper for you to use the savings to pay off what you can. Use whatever money you already have to pay as much debt as possible. Your next step is to talk to your creditors. Explain that you can no longer afford to meet your minimum repayment.
This can seem scary, but burying your head in the sand and avoiding their payment demands isn’t an option. Not only will not only affect your mental health but will also make the situation much worse too. Interest and costs will add up. Every time a demand letter is sent to your home, for example, they will be charging you an extortionate amount on top of what you already owe. If you speak to your creditors and explain your situation, you may be able to come to some arrangement. If you have multiple debts that have gotten out of control and are no longer able to keep on top of things, then a debt management plan could be a solution. This is an agency who will contact your creditors on your behalf. They will be able to arrange reduced payments which are affordable for you, and work to get your interest frozen so that it is no longer accumulating. You will more than likely pay a fee to the company providing the service. However, it will still be significantly less than what your debts and interest amount to each month.
Write Down Your Income and Expenditures
When you know exactly what you have coming in and exactly what you have going out each month in terms of your finances then it gives you much more control over your money. Write down every expenditure you need to cover each month, including everything from bills to food to travel and any other important extras. Then write down everything you have coming in, wages, benefits, investments and anything else. Your ‘money in’ should be more than your ‘money out’- if not you have a problem on your hands and will continue falling behind with money. If that’s the case, read on.
Remortgaging can sometimes be a way to save you money since the best mortgage rates only last for a short time- this is often two to five years and after this, you may have to start paying more. Remortgaging is a big decision, however it allows you to secure another fixed deal at a price you can comfortably afford. If you’re struggling financially, remortgaging allows you to borrow money which you can use to pay off things like debts. It should always be done with caution, since effectively you’re turning unsecured debt into secured debt. However if you plan properly and go about it all it correctly then it could help you out of a bad situation in terms of debt.
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Start a home based business
Starting a business from home allows you to earn extra money in a flexible way, it can be a great way to get out of debt and it something you can do around your day job. First things first, when you’ve decided to take the plunge and set up your home based business, you’ll need to get registered. It’s easy this day in age, all you need to do is fill in a few forms and send any additional information requested through the post. It ensures that you’re registered to pay the correct taxes, and from there you just need to fill in a tax return each April. Your home office is such an important space when you work for yourself. It’s a room you spend a lot of time in, so it needs to be comfy and cosy while also allowing you to stay productive. Redecorate, consider light neutrals which won’t be distracting and will make the room look more spacious and airy. To give your home business a professional look, have a website designed by an expert, and utilise things like a business address online service. Building up a home based business from scratch is hard work, but it could end up being one of the best things you’ve ever done. Do your research before jumping in so you’re able to avoid silly mistakes.
Stick To a Budget
Many of us overspend over Christmas, and if you’ve found yourself in a position where you need to catch up then now is the time to rectify this. Cut back on anything that’s not essential and use the money where it’s most needed, this will help you to quickly get back on track financially. It doesn’t matter how much or little money you have each month, a budget is always worthwhile because stops you from overspending and puts you in control of your money.