No matter how well you plan for the future, things can unexpectedly arrive without warning that throw your financial situation into disarray. An expensive car repair, sudden loss of job or just money mismanagement over a certain period, can leave you struggling to make ends meet.
During these times it can seem as if all hope is lost, but there are a few options you can take to get your finances back on track.
Whether overspending has led to your difficult money position or not, there are likely to be areas you can cut back on. Work out what you have been spending unnecessarily or over the odds on and replace with cheaper alternatives.
There are many ways to live the same life without making drastic changes to your lifestyle. Start with small adaptions, such as taking lunch to work rather than buying while you’re there. Even though this may save just £1 or £2 a day it all adds up, to between £300 and £400 a year in total. Of course any large expenses could be cut out immediately, such as excessive mobile bills, TV packages, etc.
Enforce Your Budget
After cutting out any excesses, create a fresh budget based on your new financial means. Try not to use it as a mere guideline but actually enforce it. If you know there’s a chance you’ll relapse or won’t stick to it there are special measures you should take.
Some credit and debit cards allow you to place a monthly spending budget on them, which means your card will be declined if you breach them (even if there’s still money in the bank).
Consolidating your debt
If you’ve got debt to pay off that has suddenly appeared or gradually increased over time, you could take out a second charge mortgage through Nemo, which is one option for consolidating your debts, but there are other options available such as credit cards and overdrafts. If you do opt for asecond charge mortgage, be sure to do your research before committing. A Nemo loan is secured against your home so you must make sure you can afford the repayments or your home may be repossessed. Please be aware when consolidating debt, that the APR on your new loan may be higher than the APR on the credit you are settling and may cost more over the course of the loan.
Should you choose this as a solution to aid your various financial challenges, be sure to include the repayments in your budget.