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Loans are a financial tool that can help solve many of life’s problems, from vacationing at the seaside to renovation and getting a new profession. Payments are easy to fit into the family budget if you plan properly. We tell you how to calculate your expenses and income, and what to do with a loan if you find better terms.

Start budgeting

You don’t need a master’s degree in economics to figure out a family budget. Calculating income and expenses is easy if you choose the right tools and analyze your financial habits.

In the first few days after your paycheck, a cup of coffee in the morning on your way to work no longer seems like a luxury, nor does an ersatz Friday night cocktail at the bar. To figure out where the spending gap is that’s leaking money, start writing down all of your expenses. Seriously, absolutely everything! How you write them down is your choice. There are several ways to do this.

Notepad, pen, calculator. An old, but workable way to do debit and credit. Buy a thick notepad, you write down in it every purchase, every penny spent, and at the end of the month, you count the expenditures. Everyone in the family should take notes; otherwise, you won’t be able to find a hole in the budget. We recommend dividing them into several columns or using highlighters of different colors. Count separately how much was spent on food, entertainment, clothes, utilities, travel, credit card payments.

Excel or Google Sheets. The principle is similar to a notepad but more technological. You can find ready-made templates for budgeting on the Internet. Pick the most convenient one and adapt it to you. Create tables, highlight columns with expenses and enter data. In the “Total” column, you can set up a formula that will work as a mathematician for you. It’s very important to itemize all expenses. When you see a tidy sum in the “Espresso before work” column, you might think about buying a thermal mug and brewing coffee at home. And you’ll use fewer disposable cups, which is not only economical but also eco-friendly. Here’s another tip: Upload your spreadsheets to Google Drive and share them with the whole family. You can enter entries at any time of the day from your phone or computer.

Increase your income

Another way to put your budget in the black is to increase your income. There are many ways to do this:

  • Temporary part-time jobs for family members;
  • Getting a raise in your day job;
  • renting out your home;
  • Earnings from interest on deposits.

To earn more, it is not necessary to get a second permanent job. There are many opportunities to make extra money: from trading on the currency exchange and mining cryptocurrencies to eyelash extensions and making dolls for sale. The main thing is to do everything legally. Penalties are not good for your budget.

Another option: to increase your earnings at your main place of employment. Sometimes, for the boss to agree to raise your salary, promotion, or allocation of a rate for combining jobs, you will need additional knowledge and skills. What to say if you have decided to change the field of work. In this case, you can’t do without courses. For training, you can take out a small loan. Here it is particularly important to make the right calculations and a clear agreement with your superiors about the result.

When considering this option, consider the cost of the courses, their duration, and the size of the potential pay raise. Calculate how quickly you will repay the loan and start receiving check stubs. If the analysis predicts success and your credit load allows, pay attention to the interest in the first year of repayment. Banks distribute the loan payments in such a way that you pay the interest in the first 12 months and then the loan itself.

Change the terms of your loan

A loan is just one of the tools that allow you to have what you want. Accordingly, you should treat it as a tool. If the conditions at some point are no longer satisfactory, change them, and if a more favorable offer comes along, consider it.

Restructuring. A common way to restructure the credit is to roll it over. That is, the bank reduces the number of monthly installments, but extends the payment period. Very often this option is used for mortgages.

Consolidation. Simply put, if you have several loans from different banks, you can consolidate them in one financial institution. The algorithm is as follows: seek and obtain a new loan on more favorable terms in any of the banks, repay the debt on the old loan at another bank, consolidate the remaining loans.