Thursday, September 30, 2010

The Best Ways To Pay Off Your Bills

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Thinking about pay off bills is often on almost everyone's mind. It can be very frustrating when the bills keep increasing, even though they are being paid. Certain strategies can help you decrease your bills.


Budget


Making a budget is one of the first steps to take when preparing to pay off your bills. Make a monthly budget which will limit the amount of money you spend. Try to adhere to that budget each month. Excess spending is one of the leading causes of debt. Adding more expenses to your bills will make it more difficult to pay them off. Using cash instead of credit cards can bring you one step closer to achieving your goals. When credit cards are used to purchase items, monthly finance charges are added to the ending balance. These finance charges can add up fast if the balance is not paid off quickly. One suggestion is to leave the credit cards at home when you are going shopping. This will eliminate the chance of you using them to make purchases.


Debt Consolidation


Debt consolidation is another way of helping to pay off your bills. When bills are consolidated, they are combined into one monthly bill. A debt consolidation company will assist you by contacting your credit card companies and negotiating with them to lower the higher interest rates to a more reasonable rate. A lower interest rate will be applied to the unpaid balance on the credit cards. Each month, the payment will be made to the consolidation company instead of the credit card companies. This will dramatically help reduce the debt in a shorter period of time.


Refinance


Refinancing your home may be a good option for you. Before refinancing, certain important things have to be considered. You will have to determine a few things such as how long ago you purchased the house, the new interest rate (it should be lower than the existing one on your mortgage), how long you will be living in the home and your credit score. If you have decided to refinance your home, you can use the equity in the home to pay off debts that have high interest rates. Refinancing will not only help to pay off your bills, but will actually improve your credit score as your debts decrease. You will also save money by paying less each month on your mortgage.


Paying off higher interest rates


High interest rates on credit cards can increase your bills each month. When paying your bills, it is a wise idea to pay off the ones with the highest interest rates first. This way, you will be saving on finance charges. The savings can then be applied to other bills.

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