What with the recession and soaring prices, most of us are either in some kind of debt or are struggling to manage our cash flow situation. If you are in a similar situation with EMIs and are wondering how you are going to pay your personal loans from friends, then read on…
To keep yourself out of the jaws of debt, the first thing to do is tocreate a cash on hand fund. This simply means putting something away each month to have access to an emergency money fund. Even if you save Rs. 1000 every month, it will keep you solvent. Put this aside in an easily accessible savings account so that you can get to it when you need it. If you have high-interest debts, pay these off quickly. If you are in the habit of just paying the `Minimum amount due’ on your credit card, you should know that the interest charged is so outrageous that it is guaranteed to keep you in debt forever! So clear off these debts and then begin to put money aside for the future.
However, if you are putting aside something every month as an emergency cash cushion, build your cash reserve before you pay off your debts.
A good idea is to jot down your expenses for a month so that you know which areas you can cut and which are absolutely essential. This way you can track where all your money is disappearing and come up with a plan on how to cut down on certain areas.
Budgets are essential when you are trying to control frivolous spending and free up cash. But the secret is to make a realistic budget and then keep aside some money for last minute expenses. Most people say that their greatest outgoings are at the beginning and at the end of the month.
And last but not the least, try to live within your means.
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