Budgeting is difficult. Even when people start out with good financial habits, they often get talked out of them by persuasive marketing messages that praise the value of having things right now — even if it means extra debt.
At The Law Offices of Neil Crane, we understand that credit card companies target people — especially young college students and people who have been in previous financial trouble — telling them that credit cards are like free cash. This could not be farther from the truth. The best way to financial health is to stay out of debt.
The best way to avoid giving away your paycheck is to create a budget and stick to it. Your budget should list your net income as well as all your expenses. It should plan for paying off the principal amounts on debts as well as saving some money for future needs.
The only way to make a budget work is to follow it. At the Law Offices of Neil Crane, we can help. Our goal is to help you make long-term, smart financial decisions. To do this, we continue our representation until your financial goals are achieved. Whether we begin our legal representation with bankruptcy or foreclosure concerns, we make sure that you understand your debt to income ratio — and that budgeting can put your financial life back on track starting with how to control your spending.
7 Tips to Control Your Spending
- Set up, and stick to, a realistic budget.
- Learn how to balance your accounts.
- Pay cash as often as possible.
- Don’t impulse buy. Save up for more important and/or expensive items.
- Try to pay off cards as soon as possible to avoid interest rates and late fees.
- Reduce the spending limit on your credit card.
- Not ready for a credit card? Debit cards or prepaid cards can be good alternatives.
Your Debt to Income Ratio
Debt to income ratio is the percentage of your gross monthly income that goes toward paying debts. When it comes to your financial health, maintaining a good debt to income ratio is critical. Your family should have enough income to pay the debts it incurs every month — while paying all bills due and hopefully saving for the future.
At The Law Offices of Neil Crane, in Hamden, Connecticut, we often spend time talking with our clients — making sure that they understand the basics of financial health — so that they have the tools to make the right decisions about their finances. This usually includes a discussion about debt to income ratio.
There are many financial habits that lead to a good debt to income ratio:
- Using only credit cards that are underwritten
- Paying off the balance due each month
- Using debit cards instead of credit cards
- Limiting the amount of credit you have available
- Not taking out second mortgages
- Saving for items instead of taking out loans or putting them on the credit card
Maximizing your credit score or FICO Score is an important part of your financial future. There are many components to a good credit score – the most important components are a low debt-to-income ratio, and a history of timely payments.
Making Credit Work for You
Many people tend to confuse credit and debt as two separate, unrelated issues. This could not be further from the truth. The unrestricted, preapproved granting of “credit” creates insurmountable debt. The best way to think of these two things is that credit reflects your ability to borrow. Debt is what happens when you borrow too much. For too many people, credit becomes the path to debt. The “credit industry” thrives on the harsh, unreasonable interest rates that are instituted when people fall into debt. However, there are proper ways of making credit work for you, and you need to learn them as soon as possible.
At The Law Offices of Neil Crane, our Connecticut debt relief professionals provide experienced credit counseling to people throughout Connecticut. We can help you tackle your debt problems head on and give you the tools necessary to build and maintain good credit and avoid future debt problems.
Debt Reduction Is the Key to Good Credit
There are various key steps to making credit work for you and your family. The first step is to understand the dangers of debt — the flip side of credit. Lending institutions and credit card companies want you to confuse credit and debt as they make immense profits on your debt.
A lot of people assume that having a good credit score acts as a true measure of a person. While credit scores certainly have their place, they are only a small piece of your overall financial picture. True credit and financial health require low borrowing and solid financial planning with a sound debt-to-interest ratio. Debt reduction through a well-analyzed and implemented plan with committed professional assistance is the essential first step to long-term financial health and true “good credit.”
Call for a Free Consultation With a Connecticut Credit and Debt Professional
Our lawyers can help you figure out a debt relief plan that can help with credit consolidation and debt consolidation. Once an action plan is in place, we can help with rebuilding credit as a tool to future financial health. Consumer protection laws are designed to serve you. We have been helping residents throughout Connecticut get the financial relief they need for more than 35 years. It is time to stop working for your credit card company and start making credit work for you.
Do not wait for your creditors to take action against you. We are ready to help you confront your debt problems and get on the path to a brighter financial future. Contact our Connecticut debt relief professionals online or call 203-230-2233 to schedule a free initial consultation at any of our five Connecticut locations. Understand what myths about Credit Card Debt Relief are by reading our 10 Common Myths about Credit Card Debt Relief