According to the American Banker’s Association, the average American family carries $8,000 in credit card debt. While a lot of companies claim they can magically make this debt disappear, there’s no substitute for formulating a realistic plan to get it paid off. High interest rates and late fees can complicate matters, so it’s important to make a plan and commit to it. There is no quick fix ? paying down any debt takes time ? but there are several viable options and techniques that can help.
* Prioritize
Make the payment of your credit card debt a priority. Without this basic first step, you will likely find it only too easy to keep running from the situation or accumulate more debt. Unless you address your debt head-on, it will continue to eat away at your family’s budget and even your relationships ? according to PRLog, excessive credit card debt may be a leading cause of divorce.
* Create a family budget
This is not as daunting as it may seem. First, gather the family’s financial records: bank statements, utility bills, etc. Then, list your family’s total monthly income followed by its total monthly expenditures, such as a car payment and mortgage. This way, you will have concrete numbers to work with in regard to your credit card debt.
* Pay the debt with the highest interest rate first
Lay out all your credit card statements in order of highest to lowest interest rate, and focus on paying off the highest interest rate card first. On the highest rate card, pay as much over the minimum payment as you can each month. When that one is paid off, move to the next highest interest rate card.
* Work with the credit card company
Because they are unsecured creditors, credit card companies tend to be willing to negotiate the interest rate or other aspects of your credit agreement. When you explain that your intent is to get your debt paid, most creditors are willing to listen and work with you. When you call, have your household budget and latest credit card statement from that company handy.
* Think outside the box ? do you really need to spend money on that?
What if you can’t find that extra $20 or $100 every month to dedicate to your debt payment? It never hurts to get creative. Go back to your budget and detail all expenditures – even those for which you don’t have a paper trail, such as a daily cup of coffee on your way to work or eating lunch out. Make your coffee at home and bring it to work in a travel mug, and save up to $3 a day ? that’s $60 a month you could put toward paying off a credit card. And that’s just coffee.
Brown bag it for one week a month and save the $10 a day you were spending on lunch out. In one week, that’s another $50 saved. And that waiter or waitress who brings you your lunch might be working to pay off his or her credit card debt ? waiting tables is a viable option for bringing in some extra cash with flexible hours.
Often, we just don’t realize where our money is going. Taking the time to sit down and evaluate just how much we have and where it’s being spent is not magical, but with commitment it can bring relief and eventual freedom from debt.
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Pregnancy is exciting. It’s a time filled with baby showers, ultrasounds and nursery redecorating. It’s a time of joyful anticipation. And it’s a time to think about your household budget.
But moms- and dads-to-be often forget about that last item. With everything that’s currently going on and upcoming, money matters can easily be the last thing on their minds. However, a new addition to the family will have a significant impact on the budget, and it’s very important to consider this ahead of time. Here are eight things you can do to prepare for the baby and keep your finances in order.
1. Start saving extra money as soon as you learn about the pregnancy. Those first few months won’t be as expensive as mid to late pregnancy, so you should be able to put a fair amount of money away. This fund will be helpful when it comes time to buy things like maternity clothes, baby furniture or a stroller.
2. Seek out deals on basic needs such as diapers, wipes and baby wash. Clip coupons from your Sunday paper or find them online, and then check your favorite stores periodically for sales. You’ll be glad that you stocked up on these things later on.
3. If you know the baby’s gender, put the word out to friends and relatives. They may have some baby clothes that you can use. Even if the gender is uncertain or you want it to be a surprise, you can probably get some donations of neutral clothing to help you get through those first few weeks.
4. Start checking out prices on things your baby will need on a regular basis. It may be difficult to determine how much formula she will drink or how many diapers she will go through in a month’s time, but at least you’ll have a general idea of what to expect. You may want to give it your best guess and work on a tentative budget to give yourself a head start.
5. Understand that a new addition to the family will raise many of your expenses. You’ll buy more groceries. You’ll use more electricity warming up bottles and turning lights on in the middle of the night. You’ll use more water giving baths and washing tiny clothes and bedding. Take this into account when planning your post-birth budget.
6. Resist the urge to take the easy way out when it comes to meals. When you’re tending to a newborn, it’s easy to fall into the habit of eating takeout and convenience foods. But cooking is less expensive and far healthier for you and your family. Ask other family members to help with food preparation so that it won’t be such a chore.
7. Set some money aside for medical expenses. Babies need several check-ups during their first year of life, and they’ll also need medical attention in the event of illness. Health insurance helps a great deal, but you’ll probably still have some out-of-pocket expenses such as copays and over-the-counter medications.
8. Weigh your childcare options. If a parent plans to stay home with the baby, it will significantly affect the budget. If you take him to daycare or a sitter, it will also have an impact. It’s important to carefully think things through before you make a decision and adjust your budget accordingly.
When there’s a little one on the way, it’s important to think about the financial implications. Planning ahead will make things easier when your bundle of joy arrives, allowing you to enjoy those first months and years without worrying about money.
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Taking a vacation is supposed to help alleviate stress, not add to it. But for those of us who do not have unlimited funds to work with, it can do just that. Planning fun for the whole family and providing for transportation, meals and accommodations can be tricky, and paying for it all can be even trickier.
We all know how important it is to have a household budget. But we tend to forget about budgeting when it comes to vacations. If we can create a vacation budget and follow it closely, it can help us enjoy our getaway without worrying about money.
How Much Can You Afford to Spend?
In order for a vacation budget to work, we must first determine how much we can afford to spend. If you have money set aside in a vacation fund, this might be the easy part. But if you’re working with money from general savings or a tax refund, it will require some thought.
Spending every penny you have that isn’t required for bills on a vacation is not a good idea. Having an emergency fund is important for any family. If you already have plenty of money put away for emergencies and the bills are paid, using your tax refund for a trip isn’t such a bad thing. Otherwise, take care of the more important stuff before you allocate funds for vacationing.
If you just have a savings account but haven’t decided how you will use the money, resist the urge to spend it all on a vacation. Setting some money aside for a rainy day will do you a lot more good than hitting all of the hottest spots on your trip. The general rule is to have at least enough money put back to pay all of your expenses for at least three months. If you’re nowhere near that point, try to keep enough to at least have a good start toward that.
What to Include in Your Budget
Vacation expenses have a way of sneaking up on us. And that’s exactly why a budget is so important. It forces us to consider all possible expenses and account for them so that there are no surprises. Here are the basic expenses you’ll need to account for:
* Transportation ? This could be airfare, bus, or train fare, or gas for a road trip. If you’re not taking your own vehicle, you’ll probably also need to rent a car when you reach your destination. And then there’s the gas you’ll use while you’re there.
* Accommodations ? Unless you’re doing an at-home vacation or staying with a friend or relative, you’ll have to pay for a place to stay.
* Food ? You have to eat while you’re on vacation. Some packages include a meal plan, but if yours doesn’t, you’ll need to budget for your meals. You can save money by taking your own food to prepare if you rent a place with a kitchen.
* Entertainment ? This is a biggie. You have to pay to get in to the beach, amusement park, or whatever other attraction you’re visiting. But there may be times when you or other family members want to do something else, so be sure to account for that as well.
* Shopping ? When most people go on vacation, they come home with souvenirs. So it’s important to set aside some money for them.
Money should not be a constant worry when you’re on vacation. If you set a budget and stick to it, it doesn’t have to be.
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