Saturday, January 19, 2008
A Good Budget Prevents Bad Credit
Bad credit often catches people by surprise. Uncontrolled, it can be like a virus to your finances. A good, strict budget is the best way to keep bad credit at bay. A household budget is basically a blueprint for financial security. Of course, the most effective budgets are written down â" and even better â" displayed prominently within a home. The monthly budget tacked on a refrigerator door or bathroom mirror is a good idea. That way it is a constant reminder of the importance of managing your money. Saving Money Beats Obtaining Debt The budget, done weekly or monthly, should first address the basics - food, shelter, transportation. Extra money should be put into a savings account. Saving money is a better way to deal with unexpected expenses such as car repairs and home repairs than credit cards. Many people get into bad credit because they fail to prepare for short-term or long-term expenses, and then they re forced to acquire high-interest debt. For example, saving years ahead for college allows people to sidestep burdensome student loan debt. Tips For Budgeting And Living Debt Free Oftentimes, people find it hard to discover savings opportunities in their monthly income. Professional credit counseling is good about pointing people in a right direction financially. There are various ways to spend less: Dine out less. The cost of food, drinks and tips can add up quickly. Limit costly recreation and cultural activities such as professional sporting events or concerts. We all enjoy rooting for our favorite team or seeing our favorite band in person. However, sports tickets and concert tickets are becoming more expensive. You can cut back and find more inexpensive leisure activities, like free concerts or free theaters. Use coupons to save money. Coupons are not only for grocery items, but many phone books contain coupons for various services. One thing to remember is that a budget is useless if it isn t followed. The costs of basic goods such as food and gas seem to increase every day. While a 10-cent increase on a single item may not merit much notice, increasing costs on several items chip away at your paycheck. People turn to credit cards to make up the difference. A strict budget helps you control your money. Author Bio: Brian Williams has 11 years of experience writing and editing at daily newspapers in Texas. Williams, a graduate of the University of Texas at Arlington, covered public education, city government and business issues. Learn more about bad credit and credit debt from Brian through Credit Solutions .