Credit Repair

Credit Repair and Budget and Savings

A thoughtful and realistic budget and savings plan is the perfect complement to your credit repair program. If you want real lasting credit repair results you must protect the progress that you have made. You cannot afford to let an unexpected event turn into unmanageable financial trouble. A savings plan will allow you to build a cushion against unplanned expenses. And a budget will insure that you have the room in your monthly cash flow to contribute to your savings plan.

We recommend realistic budgeting to our credit repair clients. We have noticed over the years that many poor financial decisions are made simply because of a lack of information. Any purchases made on credit should be made in the context of your overall financial ability. A written budget will put all of your expenses in perspective.

It’s not hard to construct a budget. Get a new pad of paper and clean off your desk or kitchen table. You want to be as organized as possible. It will also be helpful to have your bank and credit card statements handy. Write down all the expenses you can think of. Omit nothing, from your big monthly expenses to your little daily incidentals like lunch. Everything counts. Also be sure to include any periodic outlays like insurance that might be billed quarterly. You can calculate a monthly amount by figuring the annual costs and dividing by twelve. Once you have thought of everything you can take a look through your bank and credit card statements to see if you have missed any categories.

Add up all of your monthly expenses and compare the total to your monthly income. If you have room to move you are in good shape! But if your expenses exceed your income you will need to make adjustments. You may be able to keep up with your expenses by tapping your credit cards, but in the long term your budget must balance or you will find yourself in a jam and your credit repair progress will suffer.

Once you have found a way to balance your budget, add a new category: savings. You pay everyone else, now it is time to pay yourself. Pick a manageable amount, an amount that you can comfortably contribute to a savings account each month. Make this contribution a budgetary priority. As you did when you were building your budget, adjust your obligations so that you can make this savings contribution each month. As your savings cushion grows you will also find your confidence growing. And your credit repair progress will be safe and sound!