Budget into the black

Debt stories are never far from the news, so rather than becoming another statistic, it is perhaps time that consumers started to manage their money, rather than letting it manage them.  The first part for many is the most difficult, sitting down and actually working out exactly how much debt has been accrued. The process is, however, a vital and necessary part of a financial spring clean.Next, a budget that shows monthly income, less all expenditure should be drawn up. Here, it is important to make a monthly allowance for bills that may be payable quarterly or annually, such as utility bills, car tax or car insurance.Any effective budget needs to be realistic, otherwise following it is likely to be troublesome, so money for extras should be factored in. However, sticking rigidly to the agreed amount is imperative. Breaking the terms of a budget, even by nominal amounts, is often the difference between success and failure.At this point, a budget should now show how much money (disposable income), is available to make repayments on debts, and depending on the amount that is affordable, an idea of how long it will take to clear any borrowing should become clearer. One option is to consider a debt transfer deal. There are a wide variety of 0% balance transfer credit cards on the market, with the rate lasting anything up to 16 months. A one off-fee of between 2% and 3% of the amount transferred will have to be paid, but should the balance be paid in full within the interest free period offered by the card provider, it won’t cost a single penny in interest.If the debt is going to take longer to repay, then switching to another deal on expiry is a savvy option, or alternatively transfer to a balance transfer for life credit card where a fixed low rate of interest is paid until the full debt is cleared. The important thing when taking out a credit card with a 0% transfer deal, is not to use the card for anything else! Put it away somewhere safe to avoid temptation, rather than carrying it in a purse or wallet. The whole point is to pay off debt, not accrue it.Another alternative is to take out a personal loan to consolidate any borrowing and repay it in monthly instalments over a period that best fits any budgetary constraints. There are some competitive deals available, but remember that if insurance is required for the loan, it is cheaper through independent providers.