Budgeting is an essential skill that will enable you to better manage your spending and control your debts. The first step towards taking control of your financial situation is to do a realistic assessment of how much money you earn and the amount of money you spend by using our budget worksheet.
This is how you should make your budget
Start by making a list of your income from all sources.
Then, list your "fixed" expenses, such as your mortgage payments or rent, car payments, and insurance premiums.
Next, list the expenses that vary, such as entertainment or clothing. Writing down all your expenses, including those that seem insignificant is a good way to track your spending patterns, identify the expenses that are necessary, and prioritize the rest.
If you don't know how much you spend on the variable expenses (most people don't have a good handle on this) keep track of everything you spend for two months.
Once you have identified all your expenses, compare them with your income, and start making decisions about how much money you want to spend on the variable items.
If you have extra money after your expenses are paid, you should pay off the debts with the highest interest rates first. Any extra money you have after taking care of your debts can go into savings or a fund for a special expense.
If you don't have enough income to cover all of your expenses, you can use your budget to make decisions about where to cut spending so you can live within your income.
The goal is to make sure you can make your ends meet.
You can also get help from the nearest library. Your public library has information about budgeting and money management techniques.
Low cost budget counseling services that help you analyze your income and expenses and develop a budget and spending plan are also available in most communities. Check your Yellow Pages; contact your local bank, or consumer protection office for information. In addition, many universities, military bases, credit unions, and housing authorities operate nonprofit financial counseling programs.
By signing up for counseling session, your provided details (Name, Email ID and Phone No.) will be forwarded to the company advertising on the DebtCC. However, you have no obligation to use their services.
Some creditors and collection agencies refuse to lower the pay off amount, interest rate, and fees owed by the consumer.
Creditors/collection agencies can make collection calls and file lawsuits against the consumers represented by the debt relief companies.
Debt relief services may have a negative impact on the consumer's creditworthiness and his overall debt amount may increase due to the accumulation of extra fees.
The amount which the consumer saves with the use of debt relief services can be regarded as taxable income.