You feel relieved when you get the nod for a loan. Your purpose is met, and then comes the due date when you have to pay off the loan. Eventually, you realise your money is short again, end up rolling over the loan, and soon you make a default. And just then, the haunt begins.
You receive a barrage of emails, text messages and snail mails, first warnings, and threats if you do not turn up. You spend countless nights sleepless; anxiety does not seem to stop chasing you, frustration mounts up, and then a notice from the court catches you. Hide-and-seek is over.
It is very easy to have been caught in a debt trap, not that lenders charge outrageously high-interest rates. A responsible person will not spend more money than they earn. Reviewing your budget is the key to ensuring you cut your coat according to your cloth.
A rainy-day fund is a must to meet unforeseen expenses. You should set aside an emergency cushion as you receive your pay. Whittle down your expenses so you do not find yourself in the red at the end of the month.
You must have read all these tips many a time, but unfortunately, they do not seem to jog your conscience about money spending. Here are the three tips to follow to become conscious:
Understand the ramifications of the way you spend
People are often tempted to fritter away money as they do not feel the need to plan for the future; a lot of years are left to start saving for retirement, but the fact is that spending today will have repercussions for tomorrow.
People who earn more money than they spend live their lives better in years to come when prodigals struggle to get by due to fatuous spending.
Overspending is a significant factor that contributes to surmounting debt. You keep sending money on frivolous purchases with excuses like you are being jaded; you need to keep up with your peers, you need to present to your boyfriend or girlfriend, and the list continues.
Subsequently, your account has fallen short of cash. You do not have money to meet your essential expenses, let alone unexpected expenses. As a result, you have left with no choice other than turning to quick money loans in Ireland with no guarantor.
It is not difficult to infer that you will not be able to have sufficient cash to settle your dues, and consequently, you will fall into debt. Before you pull your wallet out, you should carefully evaluate whether it is necessary to spend money on what you want. Is it possible to avoid it? To stay on top of your expenses, always remember that financial surprises can come your way anytime. You should have money to cover them from your pocket.
- To get started, you should keep tabs on your expenses.
- Have an emergency fund that will help you back financially when unexpected expenses crop up.
It is still possible that you need to borrow money to meet unexpected expenses. You can take out a loan, but make sure you do not borrow more than you need. If you need only £100, do not make it to £150 just because you think you will easily manage payments. Further, you should borrow money only from a reputed direct lender.
Do research and find a list of genuine and honest private money lenders in Ireland. Compare their interest rates and then pick the one that best suits your finances.
How much money do you earn?
To maintain financial discipline, you must know how much money you actually make. Your actual income is what you get after taxes and other deductions. Many people do not want to look at this area. Maybe they do not want to face the truth or live under the impression that they are rich to avoid guilt, disappointment and stress.
The fact is that when you know how much you earn every month, you can easily figure out how much you can spend. You can easily create a budget, set priorities, and whittle down expenses if needed. Set categories like grocery, travel, and medical expenses so you know how much money is eaten up by each category.
Know where your money goes
You cannot be money conscious until you know where your money goes. You should make a record of each expense you incur every month. Knowingly or unknowingly, you spend a lot of money every day that you forget to account for. You should note those expenses as well.
See how much you go out of your pocket every month. Find out the average monthly spending and then determine where you can cut it down. Focus on discretionary expenses. Avoid ordering coffee every day. Instead, you should make it at home.
I prefer home-cooked meals to takeaways. Cut down on smoking to save money on a pack of cigarettes. The more you cut down, the more money you will retain in your pocket.
The bottom line:
Money conscious is nothing but being aware of your true financial situation. In other words, it is a state when you stop burying your head in the sand. When you get enlightened about a true picture of your finances, you automatically get back in the driving seat. You can easily make informed decisions about your money. This will also prevent you from falling into debt.