Budgeting your way through life is usually associated with struggle and with financial hardship. But actually, it does not have to be that way. If you keep a positive attitude towards planning a monthly budget, you will be able to do it without feeling you are wasting your time. And most importantly, you will be saving money rather than spending it on things you do not need.
Financial plans not only are the perfect aid when it comes to setting aside money but also become crucial when expenditures need to be controlled and monitored. Continue reading to find many ideas to help you to set up a budget and feel good about it!
Budgeting For Dummies
Once you get the hang of it, budgeting will become easier and easier every month until it grows to be a part of you. The first thing you need to do, is decide whether you want to make an electronic budget (computer or palm) or a hand-made one (pen and paper). Electronic ones might be easier to keep up to date, but I recommend you to work only with what makes you feel comfortable as you will be using it every month.
Now that you have chosen your budgeting method, you will have to make a list of all of your sources of income. You can even divide it by categories depending on each source (your wages, your partner’s wages, child support, rental property, etc). It is very important to have a clear idea of the sum of money that comes in every month.
Once you know for sure how much your household earns monthly, it is the turn of your expenses. You will not only have to take note of your general monthly expenditures, but also of every single extra spending you make. It will be difficult at first and you will probably forget to write down many of the things you have recently bought, but be perseverant. The only way to truly know how much you spend every month is by keeping an accurate record.
This periodical exercise will be helpful when detecting expenditures that could have been avoided. It will assist you in identifying possible saving opportunities. In so doing, you will be saving more and more each month without much effort.
Budgeting Tips
Now that you have become a budget expert, there are some things that you should not forget.
1) Have fun! Even though financial plans are meant for expense control, it does not mean that the moment you start applying these techniques, you should stop dinning out or buying presents, for instance. Do not forget to put aside some cash each month for your own little things, otherwise living on a budget will become a heavy burden and that is not the idea whatsoever.
2) By applying these simple procedures, you are ensuring a monthly saving which, by the end of the year, can become a family trip or lots of Christmas presents. Try to focus on the positive side of financial planning.
3) Keep your budget updated. This will ensure that you are actually looking at the whole picture and that it is as precise as possible. Errors can develop into less money to save and less money you will have in case of an emergency.
That was it, I hope you found it useful. May you have a happy budget!
Though credit cards are a popular way of financing purchases, truth is that they are also an expensive way of financing purchases. The interest rates charged by credit cards can double the rate charged for personal loans. Sometimes, even the rates charged by bad credit personal loans are lower than the rates charge by credit cards.
Moreover, the interest rate is not the only reason why credit cards can be more expensive. Credit cards tend to encourage spending. Since you are only required to pay a minimum payment that usually consists only of interests, you feel you can keep spending as you can afford the monthly payments. But ultimately, the accumulated debt will turn out to be really expensive.
Credit Card Financing
Credit card financing is usually the first choice for anyone making a purchase. The use of a credit card solves the problem of having to carry large amounts of cash or having to write out checks that are not so immediate. Credit card financing is just like a line of credit only it is associated with a plastic card that offers immediate access to the funds everywhere thanks to a global network.
With the use of a credit card you can either purchase a product in full and decide the amount you will finance each month when your credit card balance arrives having the option to pay even the minimum amount required that consists only of interests and a small portion of the principal or you can obtain finance from some stores that agree to charge you small installments with an interest rate already calculated in the amount of the monthly payments. Each Month, the store charges your card with the installment till the product is fully paid.
Advantages Of Credit Cards
The main advantage credit cards offer is their flexibility. Besides the easiness and comfort they provide by eliminating the need of cash or carrying checks and remembering account numbers and such, it is widely accepted in almost every store in hundreds of countries.
Besides, when your credit card balance arrives, you do not need to pay all the balance in full, you can pay a portion (at least the minimum payment required) and finance the rest. The next credit card balance will have the unpaid balance of the previous month and any new purchases you may have made during the current month.
Personal Loan Advantages
However, the interest rate charged by credit cards is high. It can sometimes reach even 20% which is extremely expensive. Some people consider such rates to be abusive. And given that you can pay only the minimum amount required, you may feel tempted to do so and this leads to debt accumulation which is a widespread problem among American consumers.
Personal Loans on the other hand provide a single amount to purchase whatever you need at a fixed and considerably lower rate (between 8% and 15% usually) with affordable monthly payments that are also fixed. This lets you budget your expenses and have more control over your spending, thus avoiding debt accumulation that can lead to bad credit eventually.
Many advertisements on the internet and on other media suggest that you can use certain unsecured personal loans for whatever purpose including making home improvements. Have you ever wondered whether personal loans are really such a good tool for undertaking home improvement projects? Here are some thoughts about the issue.
Making home improvements often requires financing but not any financial product will do. It needs to provide certain flexibility that is needed to complete any home improvement project. Unsecured personal loans are really a flexible source of financing. Do they have what is needed to finance a home improvement project?
Loan Amount
Unsecured loans do not carry very high amounts and thus, it really depends on the type of improvements you need to make whether an unsecured loan can provide the needed funds or not. Unsecured personal loans can easily provide funds to finance home improvement projects from a couple of hundred dollars up to tens of thousands.
Home equity loans (secured loans), on the other hand, can reach hundred of thousands dollars that can fund more expensive home improvements projects like rebuilding a property, adding floors to a building, etc. Thus, depending on the kind of project you have in mind you will need a secured loan or you may do fine with an unsecured loan.
Overall Costs
The interest rate of unsecured loans is higher than the rate charged for home equity loans or lines of credit and thus, the amount of money you will spend on interests over the whole life of the loan will increase with the loan amount and with every year of the repayment program.
Thus, unsecured loans can be really expensive for financing home improvement projects if you need funds to finance an expensive project and you want to repay the loan in several installments. Anything longer than 48 months will turn out rather expensive compared with a home equity loan of up to 5 years.
Repayment Programs
Unsecured loans do not have long repayment programs. However, given that almost no one undertaking a home improvement project wants to finance for more than 5 years, truth is that unsecured loans do not present limitations on this matter. An unsecured loan repayment program can last from a couple of months up to five years.
Home equity loans for home improvements, on the other hand can be repaid in up to 15 years. These periods of time are useless for inexpensive home improvement projects but can be very useful for high cost home improvements. So, it definitely depends on the cost of the project whether you will do better with an unsecured loan or with a home equity loan or line of credit.
Approval
There are not many differences between the requirements needed to get an unsecured loan or a secured loan when you are using the money for home improvements because in either case you do own a property. However, the loan approval processes of unsecured loans are faster due to the fact that there is very little paperwork to do.
