The neighbors just bought a new car. You look at your 2002 vehicle with 175,000 miles and immediately go online to check your savings account balance. Depression begins to set in. How do they do it? They just bought a new car six months ago! They are driving in style, and you can barely make the minimum payments on your credit cards. How can this be so?
Your personal debt is a reflection of your past spending habits. Granted, not all debt can be a direct reflection of your capabilities to properly manage money. For example, there may have been a situation that was simply unavoidable, and as a result, you became a financial victim. That’s why a visit at Dr Credit would be worth it.
Major catastrophic events can be difficult, if not impossible, to overcome.
For most, managing your finances takes knowledge and discipline. If you are married, you and your spouse must both be on the same page when it comes to spending and saving. The wealthy didn’t get wealthy by being in debt up to their ears. They learned at an early age how to prepare a monthly budget, the difference between good and bad credit, how a credit score affects interest rate, the difference between secured and unsecured loans, how and when to borrow money, appreciating and depreciating assets, and how your spending habits can improve your credit rating.
Preparing a Monthly Budget
You would never begin a long trip without knowing how much gas is in your tank, and more importantly, how far that gas will take you. So should be the same with your finances. No purchase should be made and no bill should be paid before knowing exactly how much money is in your account, and knowing exactly how far that money will take you.The financially secure began their journey with a monthly budget. Most people are paid weekly, every two weeks, or once every month. It is best to make a monthly budget, because most debt gets repaid based upon a monthly payment.
Begin your budget by listing your total monthly net income and your total expenses. Net income is the amount you have left to spend after all deductions are taken from your paycheck. Expenses should include absolutely everything. Every dime you spend needs to be budgeted. By budgeting every dollar spent, and realizing where it gets applied, you begin to clearly see your true financial situation.