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Credit Repair
Credit Repair: Budgeting Your Credit Card
Debt
You're in over your head, and feel like you're treading water.
All you can make are minimum payments, and when there's a family
emergency, you fall behind in your payments. All of this affects
your credit history in a negative way. What are your options?
You can begin with credit repair by watching every cent that you
spend. Here's some more information about simple credit repair.
Budgeting
Lock your credit cards up, don't CUT them up. If you cancel them
while having financial difficulties, you may find it hard to get
one again. Even if you do have credit card debt you can start
to pay it off.
In order to get an overall look at your family income and debt,
you need to sit down and total up what your net income or take
home pay is, against what you owe in everyday living expenses
and regular bills, including your credit cards. What's left over
when you subtract the expenses from the income, is referred to
as "disposable income". From this, you may be able to
pare off some extra, to begin paying back the worst of your debts.
But don't leave yourself high and dry. Try to put 10-15% into
a special account or fund for emergencies, and DON'T touch it.
If you build up a few hundred dollars with saving and budgeting,
take a couple of hundred and put it against your highest interest
debt. The sooner you pare down the principle, the less you're
going to pay monthly, and the sooner it gets paid off entirely.
Then you can apply any extra income to your next highest interest
debt, and so on.
Budgeting isn't always easy, but it can be done. Many families
are surprised when they sit down to look at what they need, versus
what they want. There's nothing wrong with brown-bagging it for
lunches instead of going to the cafeteria or local take-out every
day. A thermos of coffee, or juices bought at a grocery store
(cheaper in large quantities over a vending machine) puts that
change back in your pocket. Car pooling saves wear, tear and repair
on your car, plus gas costs. Shop the second-hand stores for children's
and adult clothing that you wear every day, and reserve clothes
spending only for special occasions or personal items.
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