Families today have a challenge when it comes to managing a budget and sticking to a budget. Salaries for families with a minimum education are usually below the poverty level. There are the few lucky individuals that land that great job with high salary and great benefits. For the rest of us, we have to live on peanuts. Take a young couple just starting out. They both get a job that is paying 8 dollars per hour. He brings home $240 per week after taxes and she brings in about the same. Their combined salary per month is about $1800. They rent a house for $700 per month. The light bill runs about $200., their water runs about $50., and their cable is $100. This totals $1050 per month so far.
Say they have a vehicle that they are making payments on. The car payment is almost 400 per month. Then there is car insurance of $200 per month. As you can see, we are already at around $1700 per month before food, phones, clothes, medical insurance, medications, and unexpected mishaps. This is one reason people begin to slip with their credit. People begin applying for credit cards that they can not pay back. They begin to get behind on their bills and have a hard time catching up.
Stretching your budget may help you to pay all of your bills on time. Some people may use debt consolidation through personal loans to decrease the amount of money they have going out each month. One larger loan may cost a lot less than 3 or 4 smaller loans combined. Interest is accruing on each loan or debt that is out there. If you can combine all of your debt into one payment, you will only have one payment interest. This should allow you to pay off old debt faster.
Some people use their home equity to pay off old debt. Refinancing your home may give you a smaller payment with money in your pocket. After a few years of payment, your house should be worth more than you owe. This is known as equity. The equity can be good if you need home improvement, have a hospital or medical bills, or you want to purchase a newer vehicle. It is always good to pay off other debt with the equity money instead of accruing new debt.