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Blowing the budget

Dear WendylI have real problems paying my bills. Money is tight as I’m in my early twenties and don’t earn very much, but I do budget and should have enough to pay everything. However, for some reason I just don’t. I think I’ll just leave them for a week, then I get busy and forget, and then the bills mount up and I’ve spent the money, and the next thing I know there’s a debt collector on my doorstep. I want to start this year on a good financial footing, but thanks to my forgetfulness I have a big credit card bill and other loans owing. How can I sort myself out? Peter, New Plymouth

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Dear PeterI used to be just like you. I had an aversion to getting the chequebook out, then I’d get busy, and then it would all turn to custard. Something that really helped me was automatic payments. I know they sound scary because you worry that the money won’t be there when the bills come out, but if you’re organised they can be a real godsend. Work out what days your pay goes in and have the APs coming out the next day before you have a chance to spend it. Also, with your credit cards and loans, talk to your bank about getting one big loan at a lower interest rate to cover the whole lot and pay them off together. Credit card interest is a lot higher than a bank loan, so you’re paying through the nose if you don’t meet your payments. And one big loan is easier to manage with an AP. Have a look at www.sorted.org.nz for more advice about budgeting. I wish you all the best – and good on you for taking control of your money. By the end of 2008 you’ll have a real sense of achievement and you may even have some savings.Wendyl

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