What do you do when there's a major sale event being organized in your town? Do you make a shopping list or you don't? Are you guilty of overspending in those events that vouch to save you dollars but actually the truth is otherwise? If you said yes or are still undecided, then here are some of the facts to help you clear the clout in your mind and arm you with better judicious choices to decide whether or not a sale is sufficient to call for spending, even when you don't need to.
The ever present budgeting challenges The debt call
If your expenses are more than you've set yourself in a month as your household budget, then that is a good enough indication to say that you're spending more than you should. In other words, you are not making smart financial decisions as far as your budget and expenditures are concerned. According to the financial experts, overspending in absence of proper justifications is an unacceptable behavior. Such behaviors either lead to a stagnant financial position or it could turn into much worse and spiral down to overwhelming debt and even bankruptcy.
Personal finance advocates cite that overspending beyond one's means and budgetary allocations cannot be approved unless one faces an emergency like an immediate hospitalization or an urgent home repair something that can't be delayed like a defunct heating system during winter. However, let's make this very clear that a new pair of flashy red stilettos or a tuxedo does not fall into emergency costs, whatsoever.
In order to help you avert excessive spending, particularly during sale events, here you'll find some interesting tips to kick off your smart spending plan. The key here is that you need to think before buying anything. This trick will help you to decode and understand whether the item you want to buy on sale is worth spending or not. It goes without saying that you should do this every time you are buying goods that are not within your budget.
Moreover, it's never too late to correct yourself, as the age old maxim goes, no matter how far you have gone on the wrong road, you can always turn back'. So, you can add whatever you learn here into your New Year's resolution for 2015. In case, you are knee deep into credit card debt, then that's one of the most suitable places to start resurrecting your otherwise ruined financial life. Having your debts consolidated could be one of the best gift you could ever give to yourself.
Reason to consolidate your credit cards
A lot of benefits are on the offer, only if you consolidate your credit card debt diligently. However, you should only opt for it, if:
1 Your loan interest rate is reduced
If your credit rating is good, and you have an equally impressive credit score, then you'll find yourself lucky to qualify for a low-cost loan or an 0% interest card. Such a card can provide you with a better rate of interest on your loans than the one you currently own. So, if this is what you find, then having your debts consolidated will actually save you a lot of money in the long run.
2 You want to become debt free faster
Once your debts have been consolidated, then you'd have a definite time to repay that loan. As a result of a set deadline, you'll start making debts regularly and pay off your debt faster. This is much better than paying the minimum on each of your credit cards every month and snowballing you outstanding credit card balances into something overwhelming.
Reasons not to consolidate your credit cards
Though consolidating credit cards has helped many people to break the vicious cycle of debt for good, yet the same may not hold true in your case. So, its better to assess all your options before taking the final call. You shouldn't opt for credit card consolidation, if:
1 Your credit score is pathetic
In absence of a good credit score, it is likely that your application for a fresh line of credit at an affordable rate of interest will stand rejected. This is especially true in case of 0% interest credit card or a personal loan with the choicest terms and conditions.
2 You fail to make regular repayments
Consolidating credit cards or any kind of loan is basically a solution to resolve then when they have spiralled out of your control. However, if you continue to miss your monthly payment deadline, then the overall outstanding loan balance will only grow and aggravate your financial woes further.
The final word
Having your credit card debts consolidated will only help you to organize them and pay them back permanently. Through this debt relief measure, you'll be able to improve your credit rating and lead a hassle-free life. Still, you must ensure that you have the necessary financial resources to make the payments on your new consolidated loan.