Exterminate your high interest debts – Manage your personal finance in this wild economy

September 9th, 2011 by admin | Print

5th August, 2011 was a D-Day for the United States of America as the Standard &Poor’s took the historic decision of stripping off the nation of its AAA credit rating and reducing it to AA+. The S&P has never taken such a grave decision as quickly as it has done with the US and this has taken the consumer, financial analysts and the investors by surprise. Those who were already suffering from debt problems are being nervous to hear that the interest rates on personal loans will increase post the credit downgrade. Interestingly enough, the present economic state doesn’t change the financial tips that you must follow even when there is no such extreme financial event. Have a look at some financial tips that can assist you in avoiding your financial issues.

1)     Craft a frugal budget: During this economy, when the price of things will rise and also the interest rates on the loans, there is no other way in which you can contain your finances than to follow a frugal budget. Living a frugal life doesn’t mean pinching your pennies. It just means that you have to make sure that your pennies are spent on things that you actually need and on things that you can’t do without. Distinguish between needs and wants and make sure you spend money only on the things that you need and not on those that you want.

2)     Pay your bills on time: If you’re seriously interested in keeping your debts at bay, you must make sure that repay your high interest bills on time so that you don’t incur late payments and penalty fees that unnecessarily boost your monthly payments. Try and keep reminders on your phone or anywhere else so that you don’t forget to pay the bills on their due date or even before the due date.

3)     Save money for financial surprises: Surprises can always spoil your day and if you don’t save enough money, you may be in danger. Save at least 10% of what you earn in a month irrespective of how much amount you earn in a month. The financial analysts are always warning the investors about yet another downgrade and therefore you should keep building an emergency fund that you can fall back on when you’re in need.

4)     Keep a watch on your credit score: Most people are not aware of the fact that they must check their credit report time to time in order to keep a track on the negative listings that may be there on your report. Dispute against all the erroneous information so that you can make sure that your credit score is made up of the costs that you have incurred and not anyone else.

If you feel that you can’t address your debt problems on your own, you can consult a financial counselor who can advise you on effective money management techniques. If you incur high interest debt, get in touch with a debt relief company and repay your debts in small and affordable monthly payments.

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