Money Management Tips
It is crucial to learn money management, including debt consolidation in Ottawa, or to seek credit counselling in Kingston to avoid the impacts of debt, including bankruptcy.
Switching to cash
Many consumers no longer even carry cash with them for the sheer convenience of being able to pull out a card, instead, and not worry about having the exact right amount. However, particularly with credit cards, this means it can also be easy to lose track of your spending and lead yourself straight into debt. Although it may not seem as simple and effortless, carrying cash is one of the best ways to avoid overspending and keep yourself on a budget.
This means dividing up your money in advance by what you need to spend it on. Take only what you can afford to spend on your lunch that day to work with you, on groceries when you go to the store, or gas when you need to fill up at the station. Particularly where you overspend is where you will need to self-enforce limitations. Using cash and immediately turning over the money you are paying gives you a better sense of how much is leaving your wallet. Reviewing your receipts as the month progresses will also help.
Limiting your credit card use
In addition to the obvious of leaving your credit cards at home and avoiding temptation to purchase items online, also thoroughly checking your statements each month can help ensure you limit their usage. If anything looks suspicious or incorrect, contact the financial institution that issues the card as you may have fraudulent charges. Keeping receipts for approximately a year and checking them against your bills each month will enable you to stay in control of and organized when it comes to what you are spending.
Paying on time—meaning, approximately one week in advance to allow for the bank to process the payment—and in full are the best ways to avoid unnecessary fees. Paying on time and at least the minimum if you cannot afford the full amount, however, than skipping it altogether as you avoid the additional late fees. Financial institutions will even increase your interest rates or cut you off from the card altogether if you continuously make late payments or none at all. Naturally, this will also negatively impact your credit rating and ability to get approved for a mortgage, other loans or other credit cards. If you are simply missing payments out of forgetfulness, experts recommend setting up automatic pre-approved payments that come out of your savings of chequing account, or reminding yourself with alerts on your phone or in an appointment book.
When it comes to your credit cards, requesting an increase in your limit rather than consistently reaching or surpassing it can help you avoid a bad credit rating. If you are in good standing with your financial institution, they will likely agree. Establishing a long history with one card also bodes well for your credit rating as you demonstrate consistently good habits when it comes to paying off in full and on time. Purchasing insurance on your card if you are concerned an issue may arise that would prevent you from being able to pay could be a good idea, but assess whether it is necessary first and ensure you are not already covered under insurance you have.
Tips to save money and reduce debt
Speaking with a licensed insolvency trustee in Kingston like D. & A. MacLeod is a helpful way to avoid debt. They can review your financial situation with you, explain your options, such as debt consolidation in Ottawa or credit counselling in Kingston, money management and budgeting tips, as well as avoiding bankruptcy.