Do you spend more than you earn? Do you borrow money every month? If so, budgeting may be able to put an end to your financial problems.
Even if you feel comfortable with your finances, budgeting is still important, since you need to save for the future. If you don't seem to manage your finances even with budgeting, then bill consolidation may be able to help you take care of your bills.
With proper guidance, you can control your expenses and pay your bills on time.
How to pay bills on time
You can pay off multiple outstanding bills on time in 2 different ways: (a) You can consolidate bills into one monthly payment with bill consolidation (b) you can follow a budget to manage bills you need to pay .
Let’s find out how.
What is bill consolidation?
Bill consolidation is the process of consolidating bills into one monthly payment through a program or a loan. It allows you to make only one payment for all your bills instead of 7 or 8 every month. Usually, your interest rate will be lower than what you’re paying now.
| Bill consolidation programs | Bill consolidation loans |
|---|---|
| Bill consolidation programs consolidate bills into one payment by negotiating with creditors and debt collection agencies to pull down your interest rates and schedule an affordable repayment plan in exchange for a nominal fee. | Bill consolidation loans help you pay your bills with a low-interest loan. Basically, you take out an unsecured or a secured loan to pay your bills and fulfill other financial obligations. Afterwards, you have only one bill to be paid. |
How can bill consolidation programs help you with bill payments?
These programs are quite similar to debt consolidation programs. Bill consolidation companies consolidate multiple bills into one simple, easy monthly payment plan. At OVLG, a financial coach takes the lead on bill consolidation programs. They will negotiate with your creditors to lower your monthly payments on credit card bills, medical bills, utility bills, etc. If your creditors agree to cut your interests, the financial coach will give you an affordable monthly payment plan. Once those negotiations are done, you can pay all your bills in one payment every month until your debts are paid.
Benefits of bill consolidation programs
- 1They help to consolidate bills into one payment
- 2They help you pay lower interest rates
- 3They help you to pay less every month
- 4 They help you manage multiple bills easily
Types of bill consolidation
- 1Credit card bill consolidation
- 2Medical bill consolidation
- 3Utility bill consolidation
Budgeting
Budgeting is a skill that comes in handy for everyone. Not only can it help you cope with your expenses, but it can also help you get rich. It's a planned way of dealing with finances. Budgeting involves a thorough calculation of your gross income over a particular period. It takes into account your estimated expenses for the same period, and allows you to save the rest of your income. It helps you to prioritize your expenses, so as to increase your savings. Better management of your finances with an effective budget can help you pay off your bills and debts over time, and set money aside for the future.
What are the steps involved in budgeting?
A successful budget usually follows certain steps for effective financial management, as enumerated below:
- 1Set up a financial goal - A goal acts as a motivation when you start off with a budget. It might be a short-term goal or a long-term one. It might be to pay off your debts or to buy a house or even simply to manage your money so as to make ends meet. Whatever the goal might be, it gives you a clear purpose for your hard work.
- 2Analyze your financial situation - this is the most important step involved in a budget. A financial analysis should take into account your income, expenses, and other financial obligations. It will help you manage money by revealing underlying reasons for your financial difficulties, and can show you which problem areas you need to work on.
- 3Track the regular expenses - the daily expenses are usually the fixed ones you can’t avoid, like rent, utilities, mortgage payments, insurance premiums, groceries, transportation, etc. Figuring out the necessities will help you to prioritize your expenses.
- 4Eliminate unnecessary expenses - Other costs like entertainment or clothing are variable. Eliminate avoidable expenses and save your dollars.
- 5Formulating a plan is an essential part of a budget that helps you to achieve your goals. You must set up your payments in such a way that you can meet your financial obligations so that you can pay off your debt in a planned way. Once you identify your regular, necessary expenses, you can allocate sufficient money to them. Then, you can allocate what remains to your variable expenses. Formulating a plan is an essential part of a budget that helps you to achieve your goals.
- 6Save the surplus - Whatever your objective might be, a budget is not of much value if it doesn't allow you to save. You might be saving for any reason - for your child's education, for your future, or for your home. But after providing for your expenses, a budget plan should always allow you to save. Your savings will ensure that you have financial resources in a crisis, and can avoid incurring further debt.
- 7Leave room for emergency expenses - When you plan your budget, leave room for future expenses you cannot foresee, and for significant life changes. A flexible budget is friendlier than a strict one. You must leave space for treats or luxuries at times so that you don't feel pressured by overzealous financial planning.
- 8Stick to the plan - Strict plans and inflexible schedules usually fail in a budget, but so do terrible plans. An ideal budget should be simple and balanced so that it's easy to follow and still be comprehensive.
Read more: How budgeting and frugality compliment each other
What are the advantages of budgeting?
Budgeting has its advantages, which you can see below:
- A budget teaches you how to manage bills every month.
- A budget helps you live within your means while handling your bills.
- A budget helps you manage bills with low income.
- A budget can help to reduce your expenses, save for the future, and pay your bills.
- A budget helps you to eliminate debt in a planned way.
- A budget helps you to prepare for planned future goals and unplanned emergencies.
- A budget helps you to maintain a steady credit score.
Should you consolidate your bills or opt for budgeting?
Nothing is better than managing your bill payments with effective budgeting. Usually, budgeting can help with bill payments when:
- 1 Your budget plan is realistic
- 2 You can stick to the plan
- 3 You can save money to pay your bills
Budgeting won’t help to lower your interest rates or payments. If your main goal is to lower your monthly payments, then bill consolidation is the best option for you. OVLG can help you with both these options. Call 800-530-OVLG to learn how to budget or consolidate bills.
How can OVLG help with budgeting and bill consolidation?
If you're finding it hard to pay your bills, call our toll-free number immediately. OVLG can help you in a number of ways:
| Budgeting | Bill consolidation |
|---|---|
| provide an initial free consultation | provide an initial free consultation |
| thoroughly review your financial situation | analyze your income and expenses |
| balance your budget by evaluating your income and expenses | ask you how much you can pay every month |
| take all your bills into account | lower your bills |
| draw up an affordable payment plan | Lower your bills |
| forward all your payments to your creditors on time | waive penalties and fines |
| guide you to maintain your finances to avoid future indebtedness | arrange a simple low monthly payment plan |
On-time payments can help you to save a lot and maintain a debt-free life. Budgeting is not a one-time activity. It's an on-going practice you need to follow for leading a healthy financial life. Likewise, when you want to pay all your bills through a consolidation program, you have to follow the repayment plan.
How can budgeting help you with bill payments?
Multiple bills may often seem difficult to manage, especially if you’re not trained in financial management. Inadequate income can result in irregular and missed payments. Consequently, your debt load keeps increasing due to accrued interests and penalties. If you're facing these kinds of issues, learn how budgeting can be of help:
- 1 Bill payments can be included as unavoidable expenses in your budget
- 2 You can more easily keep track of multiple bills.
- 3 You can cut down on unnecessary expenses, thereby making it easier to pay your bills on time.
- 4 You will find it easier to stay regular with your payments.
- 5 Regular payments can help you reduce or get rid of your outstanding bills on time.
- 6Budgeting allows you to save money, as you won't be charged for penalties or extra fees.
- 7 Your credit score will improve over time if you continue to make regular payments.
How to consolidate different types of bills
Let's discuss how you can consolidate different types of bills to save money and manage your financial life like a pro.
1Credit card bills
Credit card bill consolidation programs involve enrolling your high-interest credit card bills in a program, then paying them off using an affordable payment plan. Just make sure you choose a reputable bill consolidation company. Find out how to consolidate credit card bills.
2Medical bills
Do you have hefty medical bills? If so, then you can consolidate medical bills into one payment at an affordable interest rate. Just make sure you consolidate them before your medical bills are assigned to collection agencies. Here are a few other ways to handle medical bills.
3Utility bills
You can include utility bills into an affordable repayment plan with bill consolidation. That helps to lower monthly bills and reduce your stress load. The best part of consolidating utility bills through this program is that you have just one fixed monthly payment. You will know how much you have to pay each month, and can adjust your household budget accordingly.
How to consolidate bills with bad credit
A poor credit score can make it difficult to qualify for bill consolidation loans, which affects your ability to consolidate bills into one payment. Lenders will doubt your ability or intention to repay, and will hesitate to give you an unsecured consolidation loan to pay your outstanding bills. Some lenders will refuse to loan to you entirely, while others will agree only to write an unsecured loan at a high-interest rate. Now, the big question is, is it worth paying a high-interest rate on this new loan?
Secured bill consolidation loans are comparatively easier to qualify for when you have a poor credit history. That's because you have to pledge collateral against the loan. That means if you fail to pay off this new debt, your lender can seize the collateral. Again, the big question is, are you ready to risk losing your assets to pay your credit card bills, medical bills, and utility bills?
A smart way to consolidate bills with bad credit is to enroll in bill consolidation programs. The eligibility criteria are easy for these programs. You can qualify for these programs even with a low credit score, and bill consolidation companies won’t charge extra fees for that. So, when you want to pay all bills at a low-interest rate, and you have poor credit, it's better to enroll in these programs.
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