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This post has a collaboration of interesting and helpful articles, including one on sorting out a consolidation loan, which can be handy for helping with debt repayments.
I want to stress, this IS NOT a payday loan. I strongly dislike payday loans and think they should be banned. These are the sort that charge extremely high interest rates for very little amounts of money borrowed. I am not recommending that you EVER touch one of these. If you need another reason why not, check out this article about someone who committed suicide due to spiralling payday loan debt.
A consolidation loan is different to a payday loan. The interest rates are much lower, and if used wisely, they can help to reduce the burden of multiple monthly repayments into one monthly repayment. I took one out earlier in the year, and it helps massively with my budget as I now don’t feel overstretched and can focus on building an emergency fund and still do awesome things from my bucket list!
You must, must, must keep up the repayments though, so make sure you can afford it. It may take longer to pay off, and it does have an interest rate associated with it, which means you pay more in the long run, but in a situation where you are overwhelmed, it may be a good solution to get back on track. Just make sure you shop around first for the best interest rates, and check for any early repayment charges.
For me, as I pay off other, smaller loans I have, I’ll be setting aside these additional payments to pay off my larger one more quickly (and reduce the amount of interest I pay). I have a free e-book on this if you would like to take a look as it explains this method of debt repayment in more detail.
Christmas can be an especially stressful time of year, but if you ask for help, it is out there. Good Luck!
Now on with the post:
In case the last year hasn’t been your best financially, it is time to turn the tide and get some order restored. The beginning of the year gives us all a great opportunity to review what went well and which mistakes we should urgently correct. If you overspent or forgot to check your credit card interest, it might be time to sit down and complete a realistic assessment. Below you will find some tips on how to start improving your financial situation.
Use a Spreadsheet
To see clearly about your financial situation, commitments, and income, you will need to look through your yearly budget carefully. There are several software online you can download and use to create your own financial assessment, instead of asking for help from debt charities and companies dealing with personal finance.
(N.B. From Nikki – if you do my free 7-day money kickstarter challenge there is one included in that for you!)
Do It As If It Was a Business Budget
You will have to focus on the income and outgoings of your home budget, therefore, it is best to treat it as a company balance sheet. Looking back to your year, you might actually find out that you make less money than you spend, and you have to do something about it. If you take a step back and look at your finances realistically, you have a better chance of finding a long term solution.
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Once you have your expenses listed, you need to try and reduce them. List them and give them a priority rating each. You can get rid of magazine subscriptions or season tickets to matches you never have time to attend. If you can cut back on eating out, you can save money to become healthier. Of course, you will need to pay your car finance and insurance, but might not need an expensive premium channel on the TV. The essentials checklist may help.
Look Through Consolidation Options
It is important that you focus on the solution instead of the problem. Get in touch with companies offering bad credit loans for people who are looking to consolidate their existing finances. You might be able to reduce the monthly debt payments and get rid of the balance quicker. Make sure that you create a debt report every month, so you know exactly where you stand.
Make Plans to Cover Shortfalls
If you feel like it is impossible to cover all your essential expenses, you might need to come up with a creative plan. Try to look for a few extra hours of work, or get a promotion. Rent out a room in your house if you are not using it, or find another way of raising extra cash. Look through your attic to find items you can sell online. Start a blog or find another part time business you can make extra money from.
You might want to think about your finances carefully in the beginning of the new year. Make sure that you take a step back from your busy lifestyle and assess the situation. Create a budget and a balance sheet for the last year, so you can identify improvement areas.
I hope you enjoyed this post! Come and join my free private Facebook group so you can get involved with the discussions about money and personal finance. Feel free to ask questions in confidence and I will do my best to help.