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Debt Consolidation Credit Card Consolidation Personal Loans

Saving Money On a Lower Income

There is a range of strategies you can employ to make saving money o. One of the major areas that can save you a lot in the long term is debt consolidation. There are also some other lifestyle choices you can make to improve your financial situation.

Many people think it is all too hard, but everything you do will help, even small changes can make a huge difference. We can all employ a range of measures that will prevent budget blowouts without sacrificing all the things you like doing.

If you are finding yourself on the roller coaster of no savings, bad debt management, poor (or no) budgeting and everything is a bit chaotic, Australian Lending Centre has some tips and tricks to get you out of bad debt employing activities such as debt consolidation, saving and feeling in control again.

First things first – Where Does Your Money Currently Go?

If you don’t yet have a budget, keep a financial diary for your pay period and track how you are spending your money. The Money Smart website offers a great money tracking app to make this easier. This will give you valuable insight into your habits and areas you can save.

  • What are you spending your money on?
  • How much is left over at the end of the pay period?
  • What money needs to go out on payments and bills?
  • Are there any areas of waste or unnecessary spending?
  • Are there areas where you are going backwards and getting into arrears?

Planning and Budgeting  – Where Will Your Money Go?

Once you have a record of what your current spending entails, get online to the Money Smart website and complete the budget tool. Be sure to include all your debts, payments, bills, and income. Mark payments and amounts in your calendar. Most bank online apps have the ability to schedule payments, so they come out when they are due, but if these are also in your calendar you won’t get any unexpected payments coming out. These regular payments can including things like:

  • Mortgage or rent
  • Car payments, car registration and insurance
  • Household/health insurance
  • Credit card payments
  • Loan repayments
  • Store card payments
  • Afterpay/ZipPay (remember that defaulting on these can effect your credit score)
  • Utilities such as gas and electricity (you may want to discuss bill smoothing with your provider – this is a regular payment over time rather than a massive and shocking bill each quarter)
  • Internet and phone

Bad Debts? Talk to the Credit Provider

The bottom line is that companies want to be paid. They are always receptive if you explain your situation, especially if you have, or are, experiencing financial hardship. You may be able to negotiate with them to reduce or put a hold on payments until you get back on top of things. Of course, you still have the pay the money back, but a hiatus on payments can help in the short term. Some credit providers will allow you to reduce the final figure if you can pay the debt outright. If they offer this, it may be time for debt consolidation. If you are too overwhelmed by the phone calls and letters, then talk to us about negotiating on your behalf.

Next Steps – Take Control With Debt Consolidation

When loans and credit cards get beyond what you can cope with in terms of interest and late payments, it might be time to call in help from the experts. Companies like Australian Lending Centre can offer a solution for a bad credit debt consolidation loan. This is where you negotiate with lenders for a reduced payout figure and then apply for a single loan that will cover all your bills in one payment with a lower interest than general credit cards and late payment fees. Having one simple debt consolidation loan payment to go out eat pay period is going to be a lot easier than trying to remember everything. The sooner you simplify your payments, the sooner you will be in an easier financial situation.

Money-Saving Tips

Turn off the TV

Are services like Netflix, Foxtel, Stan, Hayu and the iTunes store getting beyond ridiculous? Try cutting out all but the most popular one, to cut back. Turning off the TV will also help cut back on power and expose you to less spend-inducing ads. You might also have app subscriptions that you don’t need. Although these are small they can add up in a month.

Stop Hoarding and Start Selling

If you have closets full of unwanted clothes, try selling them online. A good clean out also helps you to see what your wearable wardrobe looks like so you can plan your clothes shopping to maximise your shopping budget. Also if you buy anything make sure it goes with the other items in your wardrobe. Take advantage of sales, why pay retail when most clothes will go on sale towards the middle of the season.

Look for those habits that add up

You can cut back on your habits, such as drinking alcohol during the week, smoking (probably goes without saying but your health and budget will thank you), buying coffees, can all save a surprising amount as well as having general health benefits. Limiting your drinking to the weekend can save hundreds a month, depending on your drink of choice. That bottle of wine after work at $15 a night can really add up over the week. Similarly, a $4 coffee each day is $20 a week. Make coffee at home in a keep cup and save money and the environment.

Stop using your credit card

By switching to using your debit card or cash for purchases, you will be more aware of your spending habits. It will also prevent the slide into bad credit debt.

Be frugal at the supermarket

Most of the time, buying in bulk or larger sizes are cheaper over time, so check on the prices for the larger sizes. Don’t shop with kids. Pester power is a thing and can increase your spend at the checkout. Never shop when you are hungry. Buy less meat, which is expensive, and opt for more meat-free alternatives, such as tofu, beans, and pulses.

Eat Smarter

With a busy life, planning meals can be a real chore, but while using services like Uber Eats seems like a good alternative, you are actually paying $5 on top of takeaway prices and it really can add up at the end of the pay period. By shopping in bulk, cooking healthy meals and taking the leftovers to work for lunch, you can save quite a lot each day.

Are You Missing Out On Government Payments You Are Entitled To?

Lastly, make sure you check all your entitlements with regards to government payments. As a low-income earner, you may be eligible for some form of financial support if you aren’t already receiving a government benefit. When every dollar counts it’s worthwhile claiming all you can. To check on payments and entitlements, check out the Department of Human Services. Even a small additional payment may ease your financial burden. Living on a low income is hard, but these payments are designed to help.

Small Changes with Big Returns

Once you have a clearer picture about where your money goes, you make changes to your lifestyle and start on the path to greater financial control, the happier, healthier and less stressed overall you will be.If you need help with debt consolidation, please get in touch. We’d love to hear from you.

Note: This information is general, and doesn’t take into account your specific personal and financial circumstances.

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Personal Loans

Practical Money Saving Tips

If despite having a good budget, you are still spending more than you should, then it’s high time you must follow these practical money saving tips.

There are three steps involved in saving money

First, know how much you have

  • If you’re not a fan of a balance sheet, you can start doing this simple work today. Create a list of your assets and liabilities to know where you are financially. You might be earning a few thousand dollars, but your debt is over the edge. Or, you don’t have a decent income but you have zero debts. The exact amount of your asset versus your liability will help you identify serious problems with your finances and the areas that you can change.
  • One of the most practical money saving tips is to get a free copy of your credit report from a major credit bureau. It is a summary of your current and past financial obligations. You can also check the additional fees and penalties, and the accounts which should not be there anymore. By looking at your credit report, you will understand which debts are pulling your credit score down and which ones must be paid off as soon as possible. You can dispute negative entries which are inaccurate directly with the reporting agencies or your credit provider.
  • Collect all your bills and receipts. categorize them according to use—if they’re for home expenses, transportation, work-related, school,-related and so on, put a label on each file. That way, it will be easy for you to check which bills have been paid and those which were not.

Second, pay off your current liabilities

It’s not easy to pay your debts especially if you have too much of them. IN fact, debt repayment is a long journey and a lot of people have given up and settled for high interests and poor credit rating because they lost the motivation to reach their financial goals. Here are ways to pay off debts when you have limited resources:

  • Organise your debt by balance, minimum payment, interest rate and due dates. Check the billing statements or ask your lender for details.
  • Use the “debt avalanche” method to save money on interests. It is the method that pays the debts with the highest interests first and the lowest interest rate, last. By paying off the debt with higher interest, you stop the interest from accruing on your accounts.

An Example

You have a credit card debt of $10,000 with an interest rate of 20%. Each month, while you pay off your debt, a certain portion of that payment will go toward the interest.  If you pay off that debt first, you will be able to save $2000 in a year. You can consolidate your loan to pay your credit card debts or you can make extra payments each month to rip through the interest faster by making more payments toward the principal.

  • If you have limited income but you want to eliminate debts one by one, you can use the debt snowball method. Start paying the accounts with the lowest balance and work your way up to the ones with the highest balance. You may not save a lot of money in this process and it may not be the most practical approach, but it would motivate you to keep going, knowing that you are making progress. For example, you have an outstanding credit card debt of $10,000 at 20% APR, a $5000 short term loan and small consumer debts worth $500 from Store A, $300 from Store B and $150 from Store C, all at 5% interest. If you pay off your consumer debts amounting to $950, you will only save $47.50 in interest. But, it will be a good emotional experience that will motivate you to kick your hefty debts to the curb.

Third, find the money to save

Build your wealth on a daily basis. Here are simple acts of savings that could save you hundreds to thousands of dollars in a year:

  1. Keep your loose change
  2. Drink water instead of juice or soda
  3. Bring your own homemade or instant coffee at work
  4. Pack your own lunch and snacks at work
  5. Remodel your clothes. You don’t have to be an expert tailor or dressmaker to do this. Scissors and a little bit of creativity can do the trick.
  6. automate payments to avoid paying late fees on credit cards, utility bills and the like
  7. Declutter your home and office. You might be surprised to find recyclable items there.
  8. Choose thrift stores over high fashion boutiques. You can find designer clothes and good quality materials which were slightly used in there.
  9. Use your time to earn money. You don’t have to be a full-time worker to do this. Small and odd jobs may do, as long as it will give you extra money to save. You can make money out of your passion or hobbies.
  10. Avoid window shopping. It’s too tempting to resist.

Now you are aware of practical money saving tips, you will be able to take greater control of your finances. When you get started on saving, you will find it exciting and a little bit frustrating at the same time. There are times that you would be tempted to use your credit cards once again. So, if you’re finding it difficult to balance your debts and income—you can get a little help from a debt consolidation company to help you pay off all your debts and start all over again with only one debt to worry about. It will help you focus on saving and repayments, and hopefully on building your wealth as well.

Categories
Bad Credit Loans Debt Consolidation

Common Budgeting Mistakes to Avoid

Budgeting is always a good idea because this way you can control your financial resources and expenses. But there are a few mistakes that can make a budget go awry. If you don’t want this to happen, make sure you avoid the following ones.

Budgeting Mistakes

Making it too strict

Even though budgeting is not fun at all, the feeling you get when starting it is quite exciting because you believe you can spare a lot of money. Because of this feeling, many Aussies tend to make a budget they cannot afford or respect because it’s too strict.

Many articles advise people to use the money in order to achieve the things they want, but in most cases, they also recommend to cut the budget allocated for fun, discretionary spending, or indulgences. When reading such an article and being excited to spare more for your goals, you can easily be tempted to allow no money for these activities. But not spending at all on your entertainment is not possible so that you will do it anyway. In the end, you will still dispense an amount of money for these needs, but you will be disappointed because this will affect your budget. Why end up frustrated because you were too excited at the beginning? When planning your budget, try to be realistic and avoid making it too strict. Allow yourself “fun money”, but not too much.

Planning it without a purpose in your mind

Having a goal is an excellent way to motivate you to stick with the budget you made. So what is your purpose? Why are you saving money? For instance, if you still have to pay your student loans, or you have debts, budgeting is undoubtedly a wise choice. When you know that you must save money for a particular goal, your motivation is boosted. On the other hand, it is easier not to respect a budget when you don’t have any purpose. You don’t need debts to have a substantial reason to spare money. You can think about your house renovation you have dreamed for so long, a new car, a motorcycle, etc.

Not considering irregular expenses

When budgeting, keep in mind that you must include the irregular expenses, even though they do not “pop up” monthly. Some are quarterly, others are annual, and so on. For instance, consider the holiday spending, car insurance premiums, school supplies, car maintenance, home repair projects, and pet vaccinations. Additionally, don’t forget that utility bills are higher in winter and summer.