Personal Finance and Budgeting
While making extra payments towards your debt might make your budget even tighter in the immediate future, it will pay off in the long run because you will be debt-free much sooner. Make sure you understand how long it will take you to pay off your credit cards if you only pay the minimum amount due and how much you will end up paying in interest. You may be able to renegotiate the terms of your loans to get better interest rates.
It doesn't hurt to ask! Start saving.
This may seem impossible if you are always broke, but planning for the future will help you get out of this cycle. Take advantage of the k offerings at your company or open an IRA account.
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Saving money is much easier if you set up automatic withdrawals from your paycheck or your checking account so you never have to think about it. Avoid lending to others. While you may want to help out your loved ones who are in need, you really shouldn't be lending money if you can't afford to pay your own bills.
Avoid payday loans.
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While they may seem like a good solution if you're strapped for cash, the interest rates are ridiculously high, so they will only get you further into debt. Understand how much it will really cost. Before you take out any kind of loan or finance any purchase, be sure to calculate what your monthly payments will be, how long it will take you to repay the debt, and how much you will be paying in interest. In some cases, paying interest may be worth it. For example, most people cannot afford to purchase a house without taking out a mortgage, but depending on the price of the house and the average cost of rent in your area, you might still be saving a significant amount of money by choosing to buy with a mortgage instead of renting.
Be especially wary of high interest rates for depreciating assets like vehicles. If you decide to sell your vehicle after you have owned it for several years, it may be worth less than what you owe on it. This can also happen with real estate when the market conditions are poor. Always read the fine print for credit cards. Your interest rate may increase after a certain amount of time. Avoid impulse buys. If you always have a plan for what you will buy, you will have a much easier time managing your finances.
If you have a hard time controlling your purchases when you go to the mall, try to avoid going to the mall at all. Write out a list when you go shopping so you will always know exactly what you need to buy. Try spending time with more frugal people. If you are always around people who spend money carelessly, their habits are likely to rub off on you. Your urge to buy unnecessary items will likely wear off after several days. Use credit cards wisely.
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If you have a harder time keeping track of your expenses and sticking to your budget when you use a credit card, stop using it. Paying with cash instead of a credit card will allow you to visualize how much of your available funds you are spending on a given purchase. If you are able to stick to your budget when using a credit card, look for one that has no annual fee and will reward you with cash back or other incentives.
Just make sure you always pay your bill on time or these incentives will not be worth the price you are paying in interest. Assess your daily or weekly spending habits. Once you have a solid grasp on what you are spending your money on, you can start cutting out expensive habits.
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Smoking is an extremely expensive habit that can also lead to expensive medical bills, so do whatever you can to quit. Buying coffee every day instead of making it yourself can really add up. If you don't like plain coffee, try searching online for recipes that are similar to the specialty coffee drinks you like to buy.
Buying bottled water or other drinks is extremely expensive compared to refilling a reusable water bottle with tap water throughout the day. Buying lunch five days a week instead of bringing leftovers to work with you can be a real budget-killer. If you can't commit to bringing lunch every day, start by bringing lunch a few times a week. Playing the lottery on a regular basis is probably not a wise use of your money if your budget is tight.
Buy used items. You can save on everything from your next car to furnishings for your home by buying gently used items. You can sometimes find really great clothes that have barely been worn at thrift shops for a fraction of the price. Don't forget about looking for electronics that have been refurbished by the manufacturer. If you are crafty, buy solid but ugly furniture at a yard sale or flea market and freshen it up with paint instead of splurging on a new piece. Look for monthly expenses that can be cut.
If you pay for monthly memberships or subscriptions, carefully assess how much they cost, how much you use them, and whether you could give them up. Make sure you're not paying for services that you never use. For example, if you have premium cable channels that you never watch, you can cancel them without feeling like you are making any sacrifices. The same goes for your cell phone bill if you are paying for more data than you ever use. If you belong to a warehouse club, try to calculate how much you save on products by shopping there in order to determine if the membership cost is worth it.
Look for less expensive alternatives if you do use the services. For example, if you go to the gym regularly, you probably shouldn't stop exercising to save a few bucks, but you may be able to find a cheaper gym to go to or even a less expensive membership option at the same gym.
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Compare items or brands when shopping. If you're on a tight budget, you want to make sure you're always getting the best deal on absolutely everything. Take some time to compare prices for items you purchase regularly and for large purchases. If you've had the same auto insurance carrier or cable company for a long time, there might be better deals out there, so be sure to comparison shop regularly.
Shopping for necessities online can be cheaper in some instances, but make sure you take shipping charges into account. Use coupons to save some extra cash. Keep in mind that many retailers accept competitors' coupons. Be careful about driving long distances to save a small amount of money. You might end up spending more on gas to get there than you actually saved! Watch out for "deals" on items you weren't planning on buying in the first place.
Even if the price is great, you will save more by not buying it at all. Ask for a better deal. You can always ask your service providers for better deals, especially if you've been a loyal customer. The worst they can say is no. Try this with your cable and internet providers, insurance companies, and cell phone carriers.
Spend less on entertainment or at restaurants.