After Christmas spending, Michael Rupured, a financial specialist with the UGA Cooperative Extension, has a few suggestions on how to get your household budget back in balance.
• Evaluate your mortgage and home equity debt. Interest rates are low. If you have an excellent credit score and sufficient equity in your home, now is a good time to consider combining and refinancing any outstanding balance on your home mortgage and home equity loans. You should consider refinancing if the interest rate on your current loan is at least two points higher than market rates.
• To get out of debt you need to stop using credit. Make the minimum monthly-required payment on all of your credit cards, but pay as much as you can on the one with the highest interest until it is paid off.
• Scrutinize household bills. Take a hard look at your statements for telephone, cable television, Internet, natural gas, electricity, water, trash collection, newspapers and bank accounts. Eliminate services you do not use, need or can live without. Shop around for a better deal.
• Track your spending. Most families can save as much as 20 percent just by paying more attention to how they spend their money. When you identify an area of overspending, give it up or find a cheaper alternative.
• Establish an emergency savings fund so you don’t have to use credit to finance unexpected expenses. Financial experts recommend keeping three to six months of living expenses in an easily accessible account.