Managing Your Money

Managing your money can be a difficult task. Learn different ways to cut your budget and bring your debt down.

Many middle class families begin to get in over their heads, financially, once they have a baby and buy a house. Especially if a two income household suddenly becomes a one income household. Debt begins to increase from credit cards and loans. This high interest debt can quickly pile up forcing you to live from paycheck to paycheck. This heavy burden makes you feel as though you will never be free, but there are things that you can do to rid yourself from debt. Once you are debt-free, you can use your money towards more important things, like retirement, college funds, savings and vacations. These financial goals can be met, if you adhere to most or some of the following...

1. Temporarily stop contributing to retirement or savings accounts.

WHY? High interest debt is costing you more than the savings interest. You are actually losing more money each month rather than saving.

2. Transfer all credit card debt to one low-interest card or loan.

WHY? One bill is easier to manage, especially at low-interest.

3. Create a monthly budget and stick to it.

WHY? You can keep track better of where your money is actually going and apply it to where it is needed.

4. Use tax refunds, a home equity loan or cash in a life insurance policy to pay off debt.

WHY? In the long run, you will end up saving more by eliminating debt now.

5. Curb your spending.

WHY? By eating and going out less each month, you can apply that money to an emergency fund.

Once you have paid off most of your debt, you will begin to feel more in control and can start pooling your money back in savings, college and retirement funds. Try to have an emergency fund that could carry your household for at least two months in case your income stops. That way, your debt will not begin to pile up again.

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