Our country has fallen into a period of economic uncertainty. This has led to a lot of people taking pay cuts or losing jobs altogether. Families across the country have had to dip into or completely obliterate their savings just to survive. Some have even taken to living on credit. When you are trying to get back on your feet after such a disaster, things can get pretty stressful. Bad credit is something a lot of people are dealing with right now. Believe it or not, there are stress-free ways to improve credit scores and get out of debt.
You must understand that in order to get out of debt, you will need to make a commitment to sticking to a specific budget and getting out of the habit of using credit cards. Paying off one debt only to accrue yet another isn’t going to get you anywhere. Once you are sure you can dedicate yourself to this, you can begin to repair your credit.
Before you do anything else, you need to come up with a budget. Collect all your receipts and bills from the past few months, along with your bank account statements. Start with a pad of paper. If you are computer savvy, you can use a spreadsheet. Make a list of all sources of monthly income, including your salary and other payments like social security or child support.
Next, write down all the major monthly expenses, such as your rent or mortgage payment, car payment, insurance, electricity, water, cable, Internet, phones, etc. Recording your past actual monthly payments can help you estimate what the next month’s payment will be. Then you need to include allotments for groceries and other incidentals. Don’t forget to include personal allowances for things like clothing and entertainment. It’s just as important to keep track of these, as you are less likely to make impulse buys if you have a set allowance.
Once you have your budget all set up, you can clearly see how your earnings and expenses relate. If your income is more than you spend each month, you won’t have much of a problem setting up a payment plan in order to repair your credit. If you’re spending more than you make, you’re going to have to take a closer look at what is important to you, and where you can cut expenses.
When you have a budget and payment plan in place, you will feel so much better, and you’ll be well on your way to fixing and raising your credit score.