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Tracking your spending to spend less and save more

Posted on November 11, 2020 by admin

It’s hard to know where to start when you decide to take control of your money. It can be helpful to know exactly how much money is coming in and going out to start this process. 

Understand where your money is going

Although it can seem daunting to track every dollar you spend, it will give you a clear view of where you are spending your money. Small things often go missed when you estimate your spending, so taking note of these will help you understand the gap between your estimations and your actual spending. 

Track your spending and expenses

You should start tracking your spending every day for a set period of time. This could be a few weeks or a few months. You will begin to notice patterns of spending the longer you track your expenses. 

A simple way to track your spending is through a phone app. Certain apps will even allow you to limit your spending and give you an easy-to-understand overview of your expenses. 

If you regularly use your card, then your bank statement will contain every translation detail. Views these regularly or at the end of the week. 

Alternatively, you can also write down where you spend your money and how much you spent. This is especially useful if you regularly use cash. 

Reflect on your tracking

At the end of this tracking period, you should be able to see where you most spend your money. Being aware of this might help reduce your spending but there are also other things you can do. 

Take note of where you can save your money. There may be certain items that you regularly buy over time, which you might be able to cut down spending for by buying for the long term. 

You should also distinguish between what you ‘need’ and what you ‘want’. This will give you a good estimate of what ‘wants’ you are spending most on and how to best cut down on them. 

Test out a budget

Using this information, test out a budget and see if it works. This time, you should aim to set a realistic limit for the next week or month. You should account for some of your wants as well as your needs. 

Your budget may require revising, but you should create one which balances your previous spending habits, and your future financial goals. 

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The risks involved in debt consolidation

Posted on November 24, 2020 by admin

Debt consolidation is a form of refinancing which involves taking one larger loan out to pay off multiple small ones. Although this might make managing repayments easier, you may end up paying more money interest rate or fees. 

There will be companies that make offers which are too good to be true. If you feel that an offer is unrealistic and the company is promising that they can get you out of debt no matter what your situation is, you should reevaluate using their services. Don’t trust companies that: 

The goal behind the consolidation is to manage your payments, not create more fees and interest for you. Therefore, before signing onto an agreement, check how consolidation compares with your current fees and interest rates altogether. Also, take into account expenses and penalties associated with your existing loans and whether you will have to pay more money for paying off your loan early. If the expenses work out to be more, it might not be worth going through this entire process. 

Debt consolidation isn’t the only option if you’re struggling with repayments. Other options may be available which are more suited to you. You should discuss with your mortgage provider, credit provider or financial advisors to determine if there is anything that can be done. 

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