Page 46 - How To Set Up a Family Budget The Easy Way

budget, where this will inevitably fall.

Debt is a wide concept, covering lots of things, including mortgage, car, credit cards and other

retail credit card accounts and personal loans of any kind. IOU’s from family or friends also have
to be included, if you are honest about making a difference, repaying in a timely fashion and
truly want to know how bad it really is!

Your summary sheet can carry the following headings: account, total amount due, monthly
payment, total interest paid last year, and interest rate. Financial advisors call this a debt review
register. It is painful to see this data, because it will clearly show the impact of bad financial

decision-making. Interest paid gives you absolutely NO BENEFIT WHATSOEVER!

Strategies for debt and cash flow management in a family budget include:

 Consolidating all consumer debt (that is everything you owe, except for your mortgage)
and making it a priority to pay it off in a timely fashion, getting reduced rates and
maximizing your effort in wiping the financial slate clean.
 Paying off high-interest credit cards first

 Use a line of credit if you can as the interest rates are typically lower
 Suspend any kind of spending on any credit card and establish good habits paying in cash
for purchases
 Use all store-based cards wisely or not at all, if that is the disciplined approach you have
chosen

 Store-based card often have no annual fees and you could qualify for them even with a
low credit score – showing restraint and good fiscal management by making your
payments on time, every time and keeping the account up to date, will go a long way to

regaining your confidence and repairing your credit.
 Utilize the service of a good credit counseling service to assist you and deal with your
habitual over-spending and shopping addiction

 Use credit card statements for budgeting purposes for accuracy and tracking
 Loans are handled no differently – the strategy is pretty much the same: find the highest
loan balance and the highest rate and start paying the latter first

 Avoid any new debt
 If after a six month period you have paid like clockwork, contact your creditors and
negotiate a lower rate at that time to ease the burden a little bit
 Student and educational loans are approached as investments in your future and is a

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