When you look at your bank account each month and see the amount of money that you have coming in and the amount of money that is leaving, you might wonder why you're still in debt. From spending money on frivolous items to paying too much for utilities, there are several reasons as to why your income to debt ratio could be a little skewed. Sometimes, professional help might be the best answer when it comes to making a budget and getting out of your financial hole.
Not Enough Income
Whether you're a single parent and only have one job, everyone in the home is working or there is only one parent of two who are working, you might not have enough income coming into the home. Even if you work 40 hours a week or more, the rate of pay just isn't what it used to be years ago when making minimum wage might have supported a family. Try to take a class or two to enhance your skills at work, which might result in a raise. If needed, seek a better job or do something on the side to make a little extra money.
Living Beyond Your Means
For many families, especially those with children, it's nice to be able to go out to eat, get new clothes and shoes and enjoy the finer things in life. There are some things that you must buy, and there are those that you could downsize on, such as a smaller car compared to the gas guzzler in the driveway. If you find that you are living beyond your means and owe credit card companies and other collectors, you might want to consider looking at filing for bankruptcy with an attorney, such as one from Kidwell & Gallagher LTD, so that some of those debts can be relieved.
Spending As Soon As You Have Money
Some people just can't get a grasp on saving money. It might be because they want to spend it as soon as it's in the wallet. Granted, there are emergencies that arise that take your money as soon as you start to save. If you want to start putting a little money back each month, consider rounding up your dollar amounts when you make a purchase so that the difference is put into a savings account. You won't even know the money is being transferred.
Credit Is Easy To Get
Whether it's for furniture or a car, credit is too easy to get. This means that your savings will dwindle very quickly if you continue to get credit cards and get items that you really don't need. Avoid the commercials and the enticing words that draw you in to spend more money.
Saving money is hard to do when you don't make it in the first place. However, if you are able to save each month, think about starting small with getting rid of a few things in the home that you don't need. You could also think about counseling to set up a budget or pursue bankruptcy options.
Hannah Whittenly is a freelance writer and mother of two from Sacramento, CA. She enjoys kayaking and reading books by the lake.