We just don't want to deal with stressful things when we get home. We are tired, worn out and just don't have the wherewithal to put up with one more demanding chore. We just want to unwind, whether it's with a good book or a favourite television show, with our family at a quiet dinner or cheering on our favourite sports team over a microwave ready meal. We value our "down time" more with each passing year, as it becomes increasingly precious.
As integral a part of our lives as they are, bills remain one more thing to worry us. They turn our daily trip to the mailbox into a dreadful march, a pile of paper that we know just refuses to be ignored. Who doesn't breathe that little sigh of relief on the rare occasion we open the door to the mailbox and the only thing that's in there are magazines or junk mail? It's a feeling that there is just a little less stress to deal with in our day.
The drawback is that if we try to avoid that stress, the bills become even more of a problem. When we finally feel the crunch to get them in, the payments might be overdue. This can lead to late payments and adverse marks on your credit report. Marks on your credit report directly affect your future finances since more and more companies look at credit scores and payment histories. Lending companies look at them to determine not just whether you will get that loan, but what interest rate you will get if you do. Credit card companies will look at them both to process applications and periodically revaluate your interest rates, especially if your debt-to-income ratio is on the rise. Even employers are using credit reports in their background checks for prospective employees.
Once bills are paid late, it can be a downward spiral of catching up and falling out of sync with payment cycles. It is easy to fall behind more and more as the bills continue to come. Creditors expect payment by a certain time and they may charge late fees, which only add to your bill woes and make it even more difficult to get back to where you need to be. As things continue to snowball you may find yourself faced with collection calls, repossessions and legal proceedings from your creditors.
Remember that you can't overlook the emotional effects that this stress will have on your life. Our groundbreaking studies show that many people suffer from the symptoms of depression when it comes to their bills. As the collection calls continue and the late fees mount higher each month, there can be feelings of failure and despair. This just makes us want to hide even more so that we don't have to face those feelings. And as we continue to hide, the problems continue to mount.
With all of the possible life effects that late payments can have on your financial future, it is more important than ever to take control of your bills. Whether you're drowning in debt or living high on the hog, these simple rules will help you stay organised to avoid those monthly migraines when the mail arrives.
In our in-depth studies of typical budgets of individuals versus their real spending patterns we found that 75% of debtors had a discrepancy of £150 or more in their initial budgets. Participants in our study almost consistently overestimated income and underestimated expenses. This is why the approach you are about to learn is significantly more successful than the average "budget".
So after years of helping people successfully gain control over their money here are the ten core points you need to know.
1. The Average Budget is Doomed to Fail
Most budgets fail not because budgeting is bad, but because your average budget is nothing more than a page of lies. Sounds harsh, not really. When most people sit down and decide that a budget is necessary, they take out a piece of paper and write down how they would like to spend their money. This wish list does not take into account their real financial life. It doesn't account for the pocket change and fun money that is spent on incidentals or even those regular expenses that were simply overlooked.
So here is a key to building a good budget, good data. You've got to know what your monthly financial reality is before you can start projecting the future.
