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Should You Impose A Cash-Only Rule While Consolidating Debts?

August 30, 2019 By editor

Having a cash-only rule while consolidating debts seem like a good idea. In fact, a lot of articles will advise you to use cash to avoid adding more balance to your debts. But what exactly is the effect of using cash completely?

Should You Impose A Cash-Only Rule While Consolidating Debts

According to statistics, a lot of people are still using cash. In fact, 55% admitted that they do not like the idea of abandoning cash completely. Admittedly, the younger generations all prefer to use digital payments. However, the older ones are still holding on to their cash. They have started to use mobile and digital payments but they refuse to completely surrender their use of cash.

While the use of credit and debit cards, mobile payments, and digital wallets prove to be convenient and secure, cash still holds a tight hold on consumers. It is especially useful for a lot of debt-ridden consumers. As mentioned, people are usually advised to go back to using cash when they are already struggling to pay off their multiple debts. While it seems like a logical move, it may be smarter to find out the real advantages and disadvantages of having a cash-only rule.

Pros and cons of a cash-only rule while consolidating debts

Consolidating debts is an effective way to solve your credit issues. But to maximize the positive benefits of debt consolidation, you have to pay as much as you can every month. The higher the monthly payments, the faster you can get out of debt. The shorter the repayment, the more money you can save in the long run.

But how can you ensure that you can maximize your payments? Most people believe that it all boils down to how you control the way you spend your money. It is this idea that prompts consumers to come up with the cash-only rule.

The truth is, using cash has its advantages and disadvantages. It might be a good idea to get to know this before you completely turn all your payments over to cash.

Advantages of using cash only

Using cash has a lot of advantages especially for people with a lot of debts. One of the most important involves budgeting. When you are in the midst of any debt relief program, you need to make sure that you are following the right budgeting tips that will help maximize your limited finances. To be specific, you need to implement strict budgeting rules because it will allow you to reserve the funds for your debt payments.

Cash also makes it easier to avoid overspending. After all, when you do not have cash, you are forced to stop spending. Your credit cards give you more freedom to spend. It is dangerous because some people think it is an extension of their wallet. They fail to remember that every time they use their cards, they are using the money of their creditors. And to pay it back, you have to do it with interest – which is another benefit of using cash. There is no additional fees or interest to be paid.

The cash-only rule will also make you aware of how much you can really spend. Not only that, it will make you more resourceful. As soon as you realize how much you can afford, you will find ways to get what you need without spending so much. This is a helpful habit that will benefit you even after you have paid off your debts. It makes you cautious about spending.

Disadvantages of using cash only

One of the primary disadvantages of the cash-only rule is its inability to help with your credit score. While the debt consolidation program that you are currently using can repair your damaged credit score, using credit continually will also do the same. If you use cash, there will be nothing new in your credit history.

Another disadvantage is the danger that comes with carrying so much cash. When that money is stolen from you, there is no way to recover it. With credit cards, you get to have more security. If you become a victim of fraud, there is a chance to recover what you lost.

Finally, you do not get to enjoy the rewards and loyalty programs associated with your credit cards. These can also help you save money – as long as you are using the card for your usual purchases.

Now that you know the advantages and disadvantages of a cash-only rule, do you think it is worth implementing it in your life while you are paying off debt?

Tips to implement the cash-only rule during debt relief

In case you decide that the cash-only rule will work in your favor, that is okay. As long as you can commit to it, this should help you bring your finances back on track.

Here are tips that will help you implement this rule effectively.

Start slow

You do not have to convert everything to cash immediately. Choose categories that you can pay for in cash. Ideally, these should be the areas in your budget where you overspend the most. According to reports, people usually spend cash on small purchases that are $10 or less. Your groceries and daily expenses might be better off using cash. Eating out is another area where we usually overspend. You should use cash whenever you dine out too.

Set a budget for these categories

Once you have identified the cash-only categories, you need to allocate a budget for it. Be realistic with the budget so you will not end up falling short. This might tempt you to use your credit cards. Track what you spend so you can be sure that your needs are being met even as you try to get used to using cash only.

While debit cards are practically like cash, refrain from using these. You want to get used to handling cash more. Besides, when you use cash, it is more painful to spend it.

Bring only what you need

When you start using cash, make sure you only bring what you need. This will keep you from overspending. If your budget for the day is only $50, bring only that amount. Add an extra $10 or $20 for emergencies. The amount should ideally be something that you can use to get home. Make sure to keep it in a hidden compartment in your wallet or purse. Usually, we do not want to have an empty wallet. So it is more likely that you will spend less than $50 just so you have money left. This is one of the strategies that you can use to lower your monthly expenses.

Schedule when you will withdraw money

If you are implementing this cash-only rule, make sure you have a schedule to withdraw the money. Do it in a secure location and preferably with someone you know. And do this just before you go home. That way, you do not have to carry around all that money. You can immediately bring it home and keep it secure.

Plan your every expense

Once you have your funds, you need to plan how to use it. You can use the envelop strategy so you can stick to the budget that you have set for yourself. If the money in the envelope runs out, you need to stop spending.

To help limit your spending, you might want to make a list before you go out to spend. At least, this is applicable to your grocery errands. It will probably be easier if you do all your errands in one day. That way, you only have to prepare your list once. And if you make a list, make sure that you will follow it strictly. If there is something that you want to spend on that is not on the list, delay it. Go home and think about that expense. Unless it was a clear oversight on your part, you have to trust your initial judgment in not including it in the list.

If you implement it correctly, the cash-only rule can help you develop the right financial management skills and habits. It can also help control your spending so you can put more money towards your monthly debt payments. Hopefully, it can help you get out of debt a lot faster.

How To Pay Off Debt Without Compromising Your Ability To Date

August 27, 2019 By editor

Wouldn’t it be nice to pay off debt without having your financial issues compromising your dating abilities? It seems like something that should not relate to each other. However, you might be surprised at how important it really is when it comes to marriage and relationships.

How To Pay Off Debt Without Compromising Your Ability To Date

We all know how money plays an important roll in any marriage. While your emotions will play a huge role, it is also important to imagine the kind of life that you will live with a person. No matter how much you love someone, if they will compromise your financial success because of the way they manage money, it will become stressful down the road. You will end up feeling resentful towards them. That can put a strain on the relationship that you may never recover from.

Does that mean you should find someone who does not have any debt?

Not exactly. A lot of Americans are in debt – some more than the others. In fact, 2 out of 10 Americans owe so much debt that it eats up 50% to 100% of their monthly income. It will take you forever to find that special someone. And if you have your own debts to worry about, you cannot expect your date to have any credit obligations.

Some people might postpone dating or marriage just because they still have to pay off debt. But the truth is, you do not have to choose between paying off your credit obligations and dating. You can do both – as long as you know how to manage both areas of your life properly.

Dating while paying off debt successfully

It might not be as significant as getting married but dating while hiding all the debts you owe seems quite unfair – especially if things are starting to get serious. A lot of people say that they get turned off when someone has a lot of debt. While this may be something that you will not willingly reveal while you are still in the dating stage, it is also not right for you to keep it from them until after you are married. If you are honest enough, you should be able to do something about the debt even before things escalate to marriage.

Obviously, you need to learn how to manage your finances so you will not look cheap despite your debts and limited financial resources. Here are some tips that will help you enjoy the dating scene without compromising your debt payments.

No need to show off

Admittedly, the dating phase is when we try to show them our best. This is our way of making sure that the person we like would want to see more of us. We want to impress them and get them interested in who we are. However, some people think that impressing someone means you have to spend so much money on them. This is not the case. While you may want to show off, that does not mean you should give them unrealistic expectations. Show your best side but keep it realistic. If you cannot afford to date them in fancy restaurants, do not bring them there.

Think of creative yet cheap date ideas

There are so many ways to go on a date without breaking the bank. First of all, get to know the person you are dating so you can go to where both of you will really enjoy each other’s company. Skip the fancy restaurants that cost a fortune. Some people are not impressed by those. It is more important to go to a place where you can both talk and get to know more about each other. A walk in the park, watching the sunset, etc. These date options will not cost a lot of money and are quite romantic.

Try not to use debt to fund a date

Did you know that 15% of debts are used on dining or nightlife expenses? You can bet that this includes romantic dates. If you want to pay off debt while dating, make sure you are not adding to your balance. You need to budget how much you can spend and stick with it. Do not overspend especially if you are not sure if the both of you will last anyway.

Pay off debt without turning off your date

One of the things that you will probably be cautious of while you are dating is for them to find out how much you really owe. Admittedly, it can be quite embarrassing. But if you are serious about exploring the possibility of a relationship with a person, you need to be honest with them.

Here are tips that you can use so you do not turn off your date even as you pay off debt.

Step 1: Talk about money early

Obviously, this is not a topic that you should discuss on the first date. But if you find yourself dating the same person a couple of times already and it seems to be going strong, it might be time to open up a little. According to a survey, it is acceptable to ask personal finance questions when you are getting serious in the relationship (38%) or when you are dating consistently (34%). Only 2% said that it should be discussed after getting engaged. Obviously, a lot of people think this is already too late.

Of course, you do not have to talk about the heavy stuff immediately. Talk about where you live, what your career, future plans, etc. These do not necessarily talk about money but it will give each other an idea about the current financial position and any goals for the future. It is a good place to start.

Step 2: Open up about debt

When you are really serious about each other, it is safe to talk about your respective debt struggles. Admittedly, this can be very uncomfortable to talk about. But there is a way to phrase it so it will not seem as bad as it really is. Say it in such a way that you are getting their advice on what you can do. This will let them know that you do have debt but you are proactive in getting rid of it. Knowing that you want to pay off debt should not make it seem so bad. Unless you are really comfortable or you are already engaged, you do not have toe disclose how much you really owe.

Step 3: Know when to just move on

You have to face the possibility that things may not work out for the two of you because of your financial situation. As painful as that may seem, you just have to consider it a bad relationship that you just dodged. If that person cannot accept the mistakes you did in the past, then they are not really invested in having you in their future. Instead of worrying about them, continue to pay off debt so that the next time you date another, you are now more confident about your financial situation.

Make Debt Consolidation A Happy Debt Solution

August 6, 2019 By editor

Do you think you can turn debt consolidation into a happy debt solution? Of course, you can! The truth is, happiness is just a state of mind. It does not matter what goes on around you. If you can train your mind to be happy and content at all times, nothing can really phase you.

Make Debt Consolidation A Happy Debt Solution

That does not mean you will not feel sad. You are still bound to have negative feelings. You are human after all. However, you will find it easier to bounce back if you have an overall mindset of optimism. With that positivity, there is a higher chance that you can attract success. In this case, you will find success in achieving debt freedom.

Having a great financial situation can also help you feel happy. According to one study, it is proven that money can buy your happiness. However, it also revealed that you do not need too much of it. Earning around $100,000 should be enough to make you happy. It was revealed that earning too much make people less positive about their lives.

While it is proven that money has an effect on your happiness, it can be assumed that anything that threatens your finances can cause you unhappiness. That means if you have a lot of debts, that can negatively affect your level of happiness.

To keep your debts from affecting the quality of your life, you need to make sure you have a debt solution that will help you pay it off successfully. Fortunately for you, there are several options to get out of debt. One of these is debt consolidation. And if you do it correctly, you may not have to compromise your happiness even as you struggle to pay off your debts.

Tips to stay happy while completing your debt solution

Did you know that Americans are not as happy as they used to be? Reports reveal that 13% of Americans who participated in a survey said they were not happy. This is more than a 50% increase from the 8% back in 1990. While the survey did not specify the cause, it was noted in the research that economists take into consideration the happiness of consumers when determining the state of human welfare. That means the happiness of individuals is vital if you want to consider yourself a success. This is why if you are trying to improve your financial situation, it is not enough that you pay off your debts. To really feel like a success, you should strive to be happy while doing it.

The thing is, it is possible to stay happy even while you are in the midst of a debt solution. You do not have to be miserable the whole time. As mentioned, it is a matter of conditioning your mind to see the positive side of everything. But beyond that, there are also tips that you can do to maintain your happiness while completing your debt solution.

Try not to let your ego affect your debt solution

Most of the time, you can only completely pay off your debts if you change your lifestyle. That means lowering your expenses and not living as extravagant as you used to. This could be a blow to your ego. Add to that the fact that you failed in managing your finances properly – it can make you feel bad. The disappointment can make anyone unhappy. This is why you need to forget about your ego for now. You should just treat this as an obstacle or challenge that you have to overcome. When you succeed, you can bet that your ego will feel satisfied too.

Stop letting regret make you feel bad

Another thing that will threaten your happiness is regret. Stop thinking about the “what ifs” and put all of that in the past. There is no use dwelling in the things that you should not have paid for. It is already done. The only time that it is okay to look at your past is when you are trying to identify your mistakes so you will not do them again. That is the only time that it is acceptable. Instead of dwelling on regrets, it is better to focus your energy on paying off your debts.

Focus on improving yourself

One way to feel happy despite your debt situation is to try and improve yourself. Do something new to make yourself proud. You need it to motivate yourself and build your confidence. You have to believe that you are capable of improving something in your life. When you succeed, it will give you the strength and encouragement that will allow you to complete your debt solution. It will keep you from feeling any debt discouragement – which can be quite devastating and can keep you from fulfilling your goals.

Find the time to be with loved ones

It can be your family, friends or significant other. When you are in the midst of a debt solution, it really helps to have a support system. These people can encourage you to make the difficult changes that will allow you to get out of debt completely. Things will be hard and challenges will arise every now and then. You can rely on your loved ones to listen to your rants and give you words of advice. They can remind you of why you are trying to improve your finances in the first place. Having their support will really give you the strength that you need to achieve debt freedom.

Why debt consolidation can be a happy debt solution

While there are a lot of debt solutions that you can use, consolidating debts seem to the one that will make the journey a more positive one. Debt consolidation can bring a lot of benefits in your life. To be specific, it can bring two things that will help make your debt solution a happier experience.

Simplifies the repayment plan

First of all, a debt consolidation program can make your repayment plan simple. Instead of worrying about paying off multiple debts, you only have to think about that one payment that you need to meet each month. With a more simple repayment plan, you get to lower the stress that is usually associated with your debt solution. It will allow you to focus on improving your income so you can get out of debt faster.

Saves you money

Debt consolidation can also help you save money. At the very least, it can help you lower the interest rate on your debts. This will allow you to pay a lower amount on the overall debt that you owe. Instead of paying off the interest, you can use that to invest. There are also debt consolidation options that will allow you to waive certain fees or reduce your balance. Any savings that you can get can be used to grow your personal net worth.

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