Here’s an example to illustrate this: if you have enough money to pay the minimum payment due on your credit card and on your personal loan, you’re typically better off doing that. Late fees are typically over $20 – which is likely more than the interest you’ll save from paying a bit extra over the minimum payment on any single bill. Making the minimum payment is also good for your credit (versus making less than the minimum payment).Īs you make payments, keep in mind that making the minimum payment and avoiding late fees across all your debts is more valuable than paying a bit extra on any one debt. Once you stop using credit and accumulating more new debt (see #4 above), making the minimum payments on your credit cards and loans will help decrease your total balance, even if only slowly. Check out our guide to payday loan alternatives if you find yourself in a bind. If you find yourself strapped for cash, don’t get stuck using high-interest credit cards or payday loans. In order to get back on track, you have to stop accumulating more debt – which means not using your credit cards to pay for bills and other monthly expenses like food or gas. Stop using credit for bills and monthly expenses Having a budget will help you see how much you have available each month to cover your bills – plus how much is available to help you catch up on those bills you’re behind on. Make a budget that accounts for your income and your expenses, including your bills. Making some small sacrifices now, while you catch up, will pay off in the long run. For instance, giving up a streaming service for 4 months could help you get on track financially. Consider if any of your recurring bills can be eliminated, even temporarily. If you’re behind on bills, you want to catch up – and one way to catch up is to lower your expenses. See if you can eliminate any bills – even only temporarily Finally, note the minimum payment – this is typically for credit cards or other loans. For example, a $150 bill due every other month costs $75 per month. You should also note the frequency each bill is due (some bills are due every other month instead of once a month) so you can figure out how much is due per month. It can be helpful to organize your list by due date so you can see when each bill is coming due. Your bills are mortgage/rent, utilities, credit card payments, loan payments, insurance payments, subscriptions (Netflix, gym, etc.) and any other recurring expenses. This is not the same as all your expenses, which also includes things like food and gas. ![]() If you’re still stuck after checking out our steps, talk to one of our Certified Financial Specialists – they’re here to listen and help you come up with a workable plan. If you’re in that position, take a deep breath and check out our suggestions. Add in late fees, interest, and insufficient fund fees and it can feel impossible to catch up. Once you get behind on your bills, it can be difficult to catch up – especially if you’re only bringing in enough to cover your monthly expenses.
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