A budget is useful for everyone, especially for those who want to repay their debts. It is actually an important component of any debt repayment plan, which will help you eventually stay in control of your finances.
Our partners at Astro Finance have helped millions of Canadians pay off their debt faster with their consolidation loans. Check out their top tips on budgeting here to help you pay off your debt in no time.
List your income and expenses
Review your debit or credit card transactions for the past few months to assess the amount of money you are spending in different categories. You can always adjust these figures afterwards. To get started, you only need a rough estimate.
As you list your expenses, find any late or unpaid bills, keep track of your payment deadlines, and write down the interest rates on your credit cards and other loans. If you establish a monthly budget, don’t forget the expenses that come back on a less frequent basis (car maintenance, property taxes, gifts, etc.). You can add them to a miscellaneous item category each month.
Ask yourself, “What can I spend less on?”
If your goal is to settle your debts, it is important to allocate as much money as possible to repay them (within reasonable limits). Is it possible to completely eliminate certain expenses? Trust us, you will learn to live without your music services or delivery of ready meals for a few months. Or you may be able to reduce your spending in certain categories. Try to plan your meals and make a habit of making a list before going to the supermarket, or try the coupons.
Simplify your debt repayment schedule
Do you have to deal with several payment deadlines each month? A debt consolidation loan can help you combine multiple bills and loans into one easy monthly payment. Not to mention that debt consolidation can help you pay off your debts faster, saving you hundreds or even thousands of dollars each month.
A debt consolidation loan will be especially helpful if you are trying to get rid of credit card debt. Why? Credit cards represent a type of revolving debt. If you can only make the minimum payment each month, the time it takes to pay off your balance could be endless. Since Astro Finance consolidation loans are installment loans, you can count on a structured payment schedule.
Be realistic about your goals
Do you want to know the key to a sustainable budget? Make sure it is realistic! You can of course say that you will spend only $ 25 a week on your hobbies, but will you respect this decision? There is nothing wrong with allowing yourself to splurge in certain categories of your budget; just make sure they really matter to you. If it is important for you to go out to eat with your friends, try to include this in your budget, even if it means that you will only be able to go out every two weeks, or so ask your friends to try restaurants less expensive . Otherwise, you will quickly lose all motivation to pay off your debts.
Look for opportunities to increase your income
There is a limit to the expenses you can eliminate from your budget. If you feel that your budget is too tight, try to find opportunities to increase your income so that you can allocate more money to pay off your debts. It could be finding a part-time job, doing freelance work, organizing a garage sale or any other gainful activity. If you need more ideas for additional income, Astro Finance gives you ten in this article.
Do you want to know our last tip, which is also the most important? Take responsibility for your budget. Each month, reconcile your current expenses with the amounts you budgeted for. Do not be discouraged if you have spent more than expected in certain places. You will need to review your budget from time to time, as your priorities and financial goals will change over time.
If you want to know how consolidation can help you pay off your debts, visit Tipstone and get a free loan quote. You will find out how much money you could borrow and the amount of payments you would have to make without affecting your credit score.