Given the rate of unemployment and the high cost of living, a lot of people find themselves in a situation where it becomes more and more difficult to pay their monthly recurring bills. If you are also one of those people, here are five strategies that can help you to triumph over the situation.
1.Prioritize your bills:
Think about what is important and what is not for your survival. You need a place to live and you also require food to survive. When you go to pay bills, you should always pay first for the things that will help you survive. You should pay the rent or mortgage, utilities and keep some money for food. You should also provide for cost of transportation to go to work, which could mean provision for transportation or petrol for your vehicle.
At the bottom of the list, you must place credit cards and other such things that are not that essential to stay alive. Of course it would be better if you could pay something towards all debts instead of saying no money, no money at all times. It is because, you should never ignore creditors.
2.Make cuts in your budget:
After prioritizing the most important things for your survival, it is necessary to reduce the budget, so that you can free up some more money toyou’re your debts. Can you disconnect phone or cable TV? How can you reduce the use of fuel? What other adjustments can you do in your expenses?
If you have no income or they are very less, you can avail discounts to help you with the grocery bill. You can also buy in the local departmental stores and reduce spending at home and also defer some payments that do not bear any interest. In the market there are options for people belonging to the low-income group in the society. However, you have to take interest and focus on it.
3.Increase your income:
You should also explore alternative ways to increase your monthly income, even if it were not the dream job you were longing and get an average job like tutoring etc. Any job is good if it enables you to pay your bills. You may have books or furniture lying in your house that you can sell. You may have more than one vehicle. If so, you can think whether you really need them. You can very well evaluate what goods you can easily dispense with and sell them off.
4.Talk to your creditors:
It is not a good idea to bury your head in the sand. Instaed, you should be honest with your creditors and should not avoid them under any circumstance. There is a possibility that they may come forward to work with you and help you out of the situation. And even if they do, you won’t be worse than you are at present.
You can also discuss the issue with your credit card company to reduce the rate of interest or seek a way out to a more economical debt. You can also check with your doctor or insurance company if you can pay with a flexible payment plan. Explain the situation and show how you are doing everything possible to improve the situation and thus be able to pay all the bills in time in the near future.
5.Do not despair before making payments:
When you pay your dues late or accumulate significant amount of debts, bill collectors will definitely start calling you. For this, you need not despair. You have to understand that it is his work, and his only interest is to collect payments and not to insult you, harass you, threaten to take your property, much less trouble you. As I mentioned earlier, be honest and try to negotiate a payment plan with more flexibility.
Getting rid of all debts may be difficult. If after following all these tips still you cannot pay your bills, it may be time to talk to some of the financial people for help. With a little hard work, determination and some help, you can very well make your bills manageable while looking for work to catch up with the payment of services and clear all your debts.
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Actually there is a difference between secured debt and unsecured debt.
If we can turn all unsecured debt into secured debt, we are paying much less money because the interest rate is lower.
Over here, the credit card debt is as high as 24% per year, but the housing loan just tops at 2%.