How Debt Consolidation Works How Your Credit Score Affects You Money Management Tips FAQ

Money Management Tips

It seems we're very good at spending money, but learning how to manage and save it can be a challenge for many consumers. Across the country, people are working to get out of debt and free themselves from the shadow of bills, due dates and harassing creditors. While it is imperative to get out of debt, it also is necessary for consumers to learn how to prevent the situation from occurring again in the future. To receive total debt help, consumers must establish smart money management skills which will keep them debt-free, increase their credit ratings and ultimately provide a greater sense of confidence about their financial lives. After reading these tips to manage money, make sure you read how your credit score affects you.

Smart ways to manage your money

  • Be realistic about your financial situation: Take a good hard look at your financial life. How much do you make? How much do you owe? Be realistic about your situation and acknowledge the debt problems you might have. Ignoring a problem won't solve it; smart money managers take control of the situation.
  • Set a budget: Make a list of your post-tax income and a list of your expenses. Devise a strategy to stay on budget - you might need to reduce luxury costs such as premium cable television, movie rentals or morning lattes. You also can consider reducing expenses creatively, such as by reducing the minutes available on your cell phone plan, or by carpooling to work. If you don't use your gym membership, cancel it. You will find that these expenses will leave room in your budget to handle your debt and begin to save.
  • Always pay your bills on time: Always. Late payments hurt your credit rating and can establish poor habits. If necessary, set reminders on your calendar or schedule automatic deductions from your checking account. If you're in a bind and cant' make a payment, call your lender or credit card company and see if a one-time arrangement can be made.
  • Open a savings account: Set up automatic deductions each month from your checking account - or directly from your paycheck - into a savings account. Don't make withdrawals; instead, see how much you can save in a year. You could be surprised at how fast the money accumulates and how easy it can be to save.
  • Take advantage of employee benefits: If your company has a 401(k) or a similar investment plan, start investing. This is particularly important if your employer offers a matching plan, in which the company will match your investment dollar-for-dollar up to a specific amount. Why is this important? Because it's free money! Don't turn down the chance to get free money. Talk to your human resources department to find out which types of programs are available for you.
  • Resist the urge: Big-screen TVs looks particularly attractive around the Super Bowl, don't they? And new cell phones with added features can be particularly tempting. If you're trying to manage your money and get out of debt, resist your built-in urge to spend. If you can't pay cash for it now, you probably can't afford it. Be realistic: Are these needs or wants? You'll enjoy it more when you buy it later on and pay for it with cash.