Thursday, May 26, 2011

Managing your mortgage and household bills wisely

Opening the mailbox is a bittersweet experience for most of us. Nowadays, it seems that we only receive bills, bills and more bills through the post as opposed to birthday cards, love letters or gifts. It’s easy to get snowed under with the details of what needs paying and when, and before long you could be faced with the prospect of going into arrears.

Juggling the demands of running a house, keeping down a regular job and generally looking after yourself, family members and loved ones is tricky act to maintain. However, be pragmatic and it’ll become easier to keep on top of your outgoings. You may even be able to reduce some of them, which would in turn make life in general that little bit more comfortable.

When it comes to prioritizing your monthly bills, keeping a roof over your head is imperative, especially if you’re a homeowner. You risk having your home repossessed if you fail to keep up with mortgage payments, and chances are high that you’ll also be rejected if you try and borrow money in the future because your credit rating will be poor.

Being turned out onto the street may just be the start of a downward spiral that could ultimately have disastrous consequences, so it’s important to be aware (if you’re not already) of the worst-case scenarios in order to motivate yourself to stay out of financial difficulties.

Budgeting is essential. Evaluate your income carefully and compare it with where your money is being spent on a daily, weekly, monthly and even yearly basis. This will highlight whether or not you’re living beyond your means, and if it turns out that you are, you can start saving almost immediately.

Saving and cutting down on any ‘luxury’ items, like cable TV and dining out, will really make a difference, so if you can realistically live without them then do so. Food bills can also be lowered if you have the time and space to grow your own fruit and vegetables. It’s cheap to do and immensely rewarding. Being forward thinking and responsible with your finances may mean making sacrifices like this along the way, so be prepared and always keep in mind your end goal and how you’ll feel when you reach it.

You can also make savings by ringing around and surfing the net to get discounts on any other big drains on your resources. Home insurance is one such expense that can be instantly slashed. Use a key phrase like ‘moneysupermarket best home insurance deals’ or something similar when you’re surfing the net for deals – it’s likely to save you hundreds of dollars every year.

If the reminders and final reminders continue to stack up despite making changes and cutbacks, then it’s almost inevitable that you’ll search for a quick-fix method, like loading up the credit card or taking out a loan. The perils and pitfalls of going down either of these high-APR routes are obvious, so make sure you avoid them at all costs. If you’re really struggling to pay the mortgage, talk to your lender – they’ll probably be much more sympathetic than you think.

No comments: