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How a family can fall into Debts

Updated on January 27, 2016

A family means there will be the mum, dad, and two or three kids for them, have a life without any financial plan. The mother and the father had been working, they have bought a house, the mortgage payable on a monthly basis, plus they had a car to drive about and they had to feed the children. A cash flow and a family budget are necessary to have a peaceful life, so, some parents do not realise the importance they just spend as the need arises.

Use of the Credit Card.

There are mostly spenders out there and the credit card is used to do the purchases and the family falls into all sorts of problems. Children do not understand the value of money; they will want to have things as they like if the parents have not taught them to be careful with money and stop the spending when not needed. Some people have too many credit cards beyond their financial capability, and keep using those credit to do the purchases as they do not have a set budget for the home running expenses. We all need to understand that credit card is a credit account with the card suppliers with heavy interest charged on our purchases. When you credit card statement if you do not pay the full amount, the interest will be charged which is typically higher than on the average borrowings

Controlling your Bad Spending habits

You have first to organise yourself, regarding the daily routine for you and the rest of your family and make a list of the necessary expenses on a regular basis. Once you have done, do not buy anything else other the items that you have listed unless for some emergency. It is vital that you keep a record of the money that you have spent to buy those things, and then make that as weekly expenditure. After that you have to maintain a record of the money that you have received for that week, and then match it up to see whether you are under the limit. If you continue to do this in the same way on a weekly basis, you will be able to set a monthly budget and always stick to the same pattern of expenditure. So, now you know how to set up a monthly income and expenses budget, maintain it on a regular basis, you will be able to bring your bad habit under control

Consolidating your previous debts

A credit card is a nightmare and it will stress in your life and your marriage as well, so the best way to come out of that mess is to consolidate all the debts, and make one monthly payment towards it but remember to stop using the credit card. You will need some advice on consolidation of all the debts into one and only debt. The money that owes to your creditors are combined, your monthly payment for the debt needs to be included in your monthly budget, and, when doing so, you might still cut down your expenses to balance your budget. So, detail expenditures is included in your monthly budgets are: -

Mortgage and other payments for your home.

Monthly home running expenses

Payment towards the previous debts.

Total monthly income.

If you take these tips seriously and follow it up on a monthly basis, you are sure to come out of the debt and become totally debt free in the future. In the meantime, you got to train your children in the same way that is to, so that you can enjoy a happy life.

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