We’ve all done it – pulled out the credit card to buy something we really can’t afford.
It’s a hard lesson to learn, but it may be time to start creating a budget.
"In the beginning, it’s going be a little difficult, but this will help you to get to your goal," says Linda Virtudes of Central Pacific Bank.
Your goal is obviously to get out of debt. What should you think about when creating that budget?
"When creating a budget, there’s usually two ways – you can manually do it by tracking your expenses or if you like, you can use a software program normally called Quicken that will help you to get to that goal. Normally, do it for a couple of months so this way you can kind of get an idea of where your expenses are," Virtudes says.
Once you see where that money is going, it should be able to keep track of it and maybe make some cuts. Virtudes suggests starting three banking accounts.
"One for your expense account, one for your spending and we recommend opening up a savings account. And by opening these three accounts, based on how you’ve done your budget you would allocate monies to go into each account," she says.
That brings us to credit cards. They are easy to get – not so easy to pay off.
"When you’re paying the minimum payment, you’re basically only paying interest and fees. Again, based on your budget, that’s where you want to allocate additional funds in paying your payments," Virtudes says.
See the original article at: KHON2 Local News
