How to Set a Monthly Budget to Improve Your Credit Score in 2023 - Learn More!

Setting a monthly budget can be an effective way to manage your money and improve your credit score. By tracking your income and expenses, you can figure exactly how much money you will need to cover your monthly expenses. By preparing a realistic budget and keeping your spending on track, you will be able to:

Pay your bills on time, which will help to increase your credit score
Reduce your reliance on credit that could bring you further into debt
Pay down your debt to improve your financial health

What to Consider When Creating a Budget

When creating a budget, you should consider all your essential monthly expenses.

These items may include:

Groceries
Rent/mortgage
Utilities – water, electricity, gas, etc
Phone/data plans
TV/home phone/internet
Household items – cleaning supplies, house/yard maintenance
Subscriptions & memberships – gym memberships, online streaming services, music services, etc
Transportation – transit costs, gasoline, insurance
Work-related expenses – clothing, food
Childcare, kids programs
Family incidentals
Entertainment – movies, eating out, concerts
Pet Care
Vacation spending
Debt payments – car loans, home equity loans, credit card payments

Once you’ve factored in all your monthly costs, look at your net income. Your net income should include all money that comes in from employment income and any investment income. If your monthly expenses are higher than your net income, we recommend that you reduce your expenses. It’s best to focus on spending within your limits and paying all your bills on time.

What to Do If You Have Debt

Suppose you have a significant amount of debt. In that case, our experts here at Fox Miles & Associates can help you explore your options to help you manage your debt more effectively.

Debt Consolidation

In situations where you have multiple sources of debt, a debt consolidation loan allows you to pay out all of your smaller debts. This type of loan is ideal in situations where:

You owe money to several creditors
You have small loans, credit card balances, unpaid bills, payday loans
You have collateral that you can put up to secure the loan

By paying off your smaller debts, you get left repaying just one loan, from one source, with one interest rate and a single payment date. One loan payment is far less stressful and easier to manage.

Consumer Proposal

A consumer proposal is an alternate solution to debt consolidation and filing for bankruptcy. During this process, we will negotiate on your behalf to reduce your debts with your creditors. After renegotiation, you will owe less than the previous debt amount.

A consumer proposal is advised in situations where:

Your credit is severely damaged, so you may not qualify for a debt consolidation loan
You cannot pay the proposed reimbursement with a consolidation loan

Whether you take out a consolidated loan or pursue a consumer proposal, our licensed insolvency experts will navigate the process on your behalf. We will also help you prepare a realistic budget incorporating a manageable repayment plan to get back to financial health.

How to Create a Repayment Plan Worked Into Your Budget

Repaying your debts is easier with a realistic budget. We will assess your expenses and suggest ways to curb your spending so you can effectively manage your repayments. Here are some simple solutions to reduce your spending:

Evaluate how many online streaming services you actually need
Prepare lunches at home instead of eating out
Skip the coffee shop and make your own
Don’t fork out for the latest and greatest cell phone every two years
Plan your meals for the week and buy only what you plan to use

When Is a Commercial Proposal a Good Idea?

Suppose you are severely in debt with multiple missed bill payments or have declared personal bankruptcy. The good news is that you can improve your credit rating. Take a proactive approach and follow these steps for better financial health.

Create a monthly budget and stick to it. When your expenses exceed your income, this leads to trouble.
Pay Your bills on time. Missed payments can negatively affect your credit score, so prioritize these payments, so you are not subject to late fees.
Make minimum payments on your credit card if you can’t manage the total amount.
Apply for a secured credit card. Use it for some of your monthly expenses, and always pay your bill on time to build your credit score.

Credit Counselling in Edmonton

At Fox Miles & Associates, we take the time to understand your lifestyle and financial situation. Our Licenced Insolvency Trustees will work with you to implement a debt management program to manage your finances more effectively.

Contact us today for a free consultation.