This article, entitled "1 in 2 Americans Is Committing This Financial Sin," comes from SavingsAngel.com.
Are you one of the 49 percent of Americans breaking a cardinal rule of good money management?
According to Bankrate.com, that’s how many people don’t have enough money in their emergency savings to pay off their credit card debt.
Carrying more unsecured debt than savings is dangerous business. What happens if you suddenly lose your job or get sick? You can sell your car or even your house to get rid of those payments, but the credit card bills will keep coming no matter what.
If you find the balance on your credit card statement is larger than the balance in your savings account, you need to follow these five steps.
Start by figuring out what happened. Did you have an emergency? Did you marry into the debt? Do you simply live beyond your means?
Before you can get your finances in order, you need to understand how they got there in the first place.
Create a budget
Next, you need to make a budget to ensure you don’t continue to add to your debt. Make sure you’re accounting for every penny.
Remember, a budget isn’t set in stone and you can change it up as needed. However, the goal is to have a plan for your money so three days after payday you don’t start wondering, “what happened to all my cash?”
Don’t forget to plan to put money in savings as part of your budget.
Cut out the fat
You may sit down to write a budget and discover there’s no way you make enough money to comfortably pay all the bills plus buy what you need. It’s time to cut the fat.
There are lots of ways to save, from couponing to reducing utility bills. One of the reasons I created 90 Days to Abundance on SavingsAngel.com was to give people a single place to go and find comprehensive information about saving money in virtually every category.
Have a plan
Next, you need to have a plan for paying off your debt.
If you have multiple credit cards, list them all on a sheet of paper along with their balance and interest. Now, decide which one to attack first. Some people prefer to start with the card with the highest interest rate while others like to begin with the one with the smallest balance.
Send in minimum payments to every card except the one you are focusing on paying off first. Any extra money you come into – whether it’s from a garage sale or a gift – goes to that card. When it’s paid off, add the monthly payment from card one to the payment amount for card two. Continue this pattern until the credit cards are paid off.
Model good behavior
Finally, don’t forget to model good behavior, especially if you have kids. Take them to the bank with you when you deposit money in savings and make sure they understand you only use a credit card for planned purchases.
You don’t want them to think it’s ok to use credit cards as a way to live beyond their means. We may live in an instant gratification society but teaching them to wait until they can afford something may be one of the most important lessons you ever teach.
The best couponers save hundreds of dollars every month at the grocery store. However, extreme couponers can end up living very extreme lifestyles to get those savings. For over five years, SavingsAngel.com has equalized the playing field – giving extreme savings to busy families who don’t have the time or ability to be an extreme couponer. Each week, SavingsAngel.com’s over 70 angels combine over 2,000 products on sale at local grocery and drug stores with an enormous database of over 2000 different manufacturer coupons. These combinations result in our members getting access to over 300 products each week for 50% off or better. Simply log in, choose the deals you want, print or clip only the coupons you need, and save hundreds of dollars a month at regional and national stores. Our angels will personally work with you to craft a plan that will help you buy healthier food at lower prices – helping you keep $200 to $400 in savings each month.
Josh Elledge is chief executive "Angel" of SavingsAngel.com, a website that teaches consumers how to save money through a free money savings video eCourse and podcast. SavingsAngel also provides hundreds of 50% off or better deals each week to members by matching local grocery and drug store sales with its free database of over 5,000 accessible coupons. A husband and father of three, he now appears each week on television, in eight newspapers, and a number of radio stations across the country teaching families how to cut their grocery bill in half using the Internet. Elledge created the technology found on SavingsAngel.com through the need to save his own family’s money. Successfully able to cut his own grocery bill from $600 a month to less than $300 a month, his message has reached hundreds of thousands of families. SavingsAngel.com is now growing rapidly throughout the country. You can watch a short video at SavingsAngel.com that will explain more information about how to cut your own grocery bill in half with the help of SavingsAngel.com!