Jeanette A. Tucker, Bollich, Patricia A., Braud, Emily | 10/4/2004 4:27:15 AM
If your bills are piling up, you can't make all of your payments on time and you're thinking about paying one credit card balance with a cash advance from another its time to organize your credit payments and develop a plan for reducing your bills.
The first step in that process is to determine how much you owe.
Start by making a list of all your credit payments, and record the total amount you owe each creditor - that is, how much you have to pay on each debt. Then record each monthly payment and how many months it will take you to pay off the bill.
After that record the APR (annual percentage rate) you are paying on each bill and then finally add up your monthly payments so you will know how much of your paycheck has to be spent on your debt.
The minute you get in trouble with your bills, talk to your creditors and tell each how you plan to make your payments. You should first choose options that will work best for your family.
Potential strategies that could be used to decide how to handle your payments as you attempt to get out of debt include:
Regardless of which plan you choose, stop using your credit cards and avoid taking out any new loans. Instead, go for the green - that is, pay for future items with cash.
You will find paying off debt is hard work and requires discipline.
Plan some small rewards as you reduce your credit balances. Once your debts are paid up, continue to make payments to a savings account. You will find that the final cost of an item is less when you save before you buy as opposed to buying now and adding 5 percent to 20 percent to the purchase price as a result of finance charges.
For more information on family finances and budgeting, contact an agent in your parish LSU AgCenter Extension office.