Keeping up with monthly bills payments can be tough for American households. After all, they have so many bills to pay off each month. In one survey, the list included auto loans, 4 different kinds of insurance premiums, mobile phones, cable, Internet, security, and various utilities. The list is already overwhelming and it does not even include payments for the house, food, groceries, and of course, debts.
Americans are known to be quite aggressive when in their use of credit. The auto loan payment included in the mentioned list is just one of the many debts that the average household has to pay off. You also have to include the mortgage, student loans, and the multiple credit card debts that they owe.
When you combine all of these, it can make ever month quite stressful. This is why you need to do something to try and make it bearable. You cannot afford to miss your monthly bills payments because that can make things worse for you.
3 ways debt consolidation improves monthly bills payments
One of the strategies that can make your monthly payments bearable is debt consolidation. This debt solution combines multiple credit accounts into one. It usually involves opening a new credit account that will allow you to pay off your credit accounts in full. In the end, you will be left with only one credit account. That will make it easier for your budgeting strategy to ensure that all monthly bills payments will be met.
Thanks to the way debt consolidation will restructure your credit accounts, it can bring the following improvements to your monthly bills.
Frees up money to pay for bills
When you open a new credit account to consolidate debts, you get the opportunity to set up new payment terms. If your current income cannot cover all your bills, consolidating your debts can solve that. You can set up a lower monthly payment with your new creditor. Usually, this is possible if you get a longer repayment period. Your balance will be distributed over a longer time. That allows you to pay smaller amounts each month. Because of this, you can free up some of your income to meet the monthly bills payment that you cannot cover.
Makes bills payments easier to monitor
Consolidating multiple debts means you now have fewer debts. That will make your monthly bills payment list shorter. With fewer accounts, it will now be easier to monitor them. It will bring a lot of benefits to your finances.
First of all, you will less likely miss out on a payment. The fewer the bills to monitor means you can easily keep track of due dates. Because you are more aware of when your monthly bills payments are due, you can prepare for it. There is a lower chance of missing a deadline or of not having enough funds to meet the minimum payment. This will keep you from having to pay late penalty fees and charges.
Keeps your stress level low
Finally, debt consolidation can simplify your monthly payments. Since everything becomes easier to manage, your debts will not feel like too much of a burden. Even if you still owe the same amount of money, the fewer accounts to keep track of will make things seem more manageable. You will feel less stress.
When you feel less stressed about your finances, it will be easier for you to focus on other things other than trying to meet all monthly bills payments. For instance, you can also work on building wealth while paying off debt. That means you can focus on increasing your income or saving more so you can invest your money. If you can do this, you will not just achieve debt freedom. You can also improve your overall financial situation.
How to keep your monthly bills payments under control
Taking care of every single monthly bills payment can be quite challenging. Even if you are already using debt consolidation, there are still some things that you can do to make sure you maintain full control over everything. Here are some of the tips that you can do.
Maintain a budget plan
Start by having a budget plan. This is the most basic tool that you can use to maintain full control over all your financial affairs. It does not matter if your finances are in an excellent situation or if you are trying to keep up with monthly bills payments, you will always need a budget plan. This plan will tell give you an overview of your financial situation and the expenses that you need to meet each month. It will help ensure that no financial obligation will be forgotten.
Live below your means
Another thing that you can do is to get used to living below your means. For some people, this is harder to do. According to reports about the economic well-being of American households in 2018, 17% of adults expect that some of their bills will remain unpaid. These are the American adults that are not even going through an emergency or unexpected expense. That means their income really falls short, to begin with. When your income cannot cover your usual expenses, you will be forced to use credit to make ends meet. This will keep on happening until your debts have grown so much that your payments have become harder to meet.
Obviously, you should stop spending more than what you can afford. If you want to improve your financial situation, you need to change your lifestyle. You need to start living below your means. Some people think it is enough to live within their means. This will not be enough especially if you have a lot of debts. You need to live below your means if you want to have the resources that will help you grow your personal net worth.
Communicate with billers
Finally, you should also start opening communications with your creditors, lenders, and utility service providers. Every one who is sending you bills – make sure you know how to communicate with them. That way, you can work on better payment terms when there is a need. Sometimes, you start with having enough money to pay your bills. But circumstances usually change and it can suddenly leave you unable to cover all your monthly bills payments. When you know how to talk to your billers, you will have the confidence to negotiate with them so you can get better terms on your monthly payments.