Many consumers applying for credit and have been surprised to find that their credit rating is not what they thought it was. Frequent hits on the credit bureau will hurt your score and late payments regardless how innocent a mistake it may have been will also impact on your credit score. Managing your credit requires that you manage your personal finances like you would a small business. Create a budget and build in room for emergencies. Take the time to sit down and balance the budget. Write it all down. It is not a big deal and you will be surprised at what you discover about you spending habits.
I have a friend who does not pay much attention to her budget and is often late paying her bills. Recently she complained to me that she wanted to purchase a car but could not afford the payments. I asked her what her payments would be and she replied that with insurance and gas she would need to about $1000 a month but could only afford $600.
I know many people with similar lifestyles and incomes who own cars and new that my friend should be able to afford a car. So we sat down and created a budget. Once we identified all of her necessities we took a closer look at her vices.
Lets consider her vices:
Coffee: $192 a month (4 extra large coffee every day)
Cigarettes: $150 a month (1 pack every other day)
Lunch: $200 a month ($10 dollars every work day)
Dinners: $480 a month (3 time a week average $40)
Total: $1022 a month
If you find that you are spending more than you should than you have a problem. Now here comes the tough part. Identifying what you can do without. My friend needed to find $400 in her budget and needed to make some adjustments. With a little work here is what she came up with.
Coffee: $96 a month (cut out two coffees)
Cigarettes: $0 a month (she decided to quit smoking)
Lunch: $120 a month (decided to pack lunch twice a week)
Dinners: $320 a month (decided to eat out only 2 times a week)
Total: $506 a month
By cutting back on her vices my friend was able to save $516 a month and was now in a position to purchase the car she wanted. That is the power of sacrifice. The power of Car Loans Canada is allowing her to find the lender who will get her approved on the loan for which she now qualifies!
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