So you may ask ," How can a budget improve my credit?" Well, there are many ways. Think of a budget as a financial plan or a spending plan. It helps YOU, not someone else, plan how and where you will spend your money. And most importantly, how you will save it. Another plus for having a budget is when you are applying for a mortgage loan you can show the lender how much income you have and what your expenses are.
Here are the basic 4 steps to creating a budget.
1. List your income.
2. List your expenses.
3. Compare income and expenses.
4. Set Priorities and make changes so that your income will be greater than your expenses.
It sounds easy but step 4 can be a doozy! This is the step that will take the most time and research. Let's say you don't want to get rid of a few pricey items. You may want to consider researching some cheaper options.
For a budget to work , it MUST be accurate. A safe way to do that is to save a month's worth of expenses and bills. This will give you a better understanding of how you are spending your money.
Another great tool is the online FREE budgeting tool at
http://www.mint.com/
This site hooks up to your banking and will e-mail if your exceed your budget. It's an excellent way to keep track of things!
The most important thing I would say to do is to START! Until you start a budget it will be impossible to track your spending and get your credit back under control or to keep it right where it is.
