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Advice from MCCU: Five ways to add wiggle room to your budget

Source: Members Cooperative Credit Union

Are you barely getting by each month? Does it feel like one small extra expense could bust your budget?

Before, we get into the nitty gritty of our five fabulous ways to create some serious wiggle room on a tight budget, you first need to make sure you have a budget, and are sticking to it. Without a budget, your money will always be tight. If you don’t know how to make a budget, check out our 6 Easy Steps To Create A Realistic Budget.

Now that you have an established budget, here are 5 ways to create some serious wiggle room putting that extra pep in your step.

Debt Consolidation

A debt consolidation loan is a great way to simplify debt. This option allows you to consolidate all of your loans/ debt into one monthly payment at a lower rate, depending upon your credit score. Having fewer payments to make each month, reduces the number of payments you may be late acquiring additional penalties and late fees. With a debt consolidation loan, you lock yourself into a predictable monthly payment for easier budgeting, and are given a fixed term in which your debt will be paid off. The biggest benefit of a debt consolidation loan, is it could lower your interest burden and your monthly payments creating some serious wiggle room.

Loan Refinance

The number one reason people refinance is to get a lower interest rate on their mortgage. A lower rate translates to lower payments, which means you’ll pay less for your home overall. By paying less for your home each month, creates more wiggle room in your budget.

Home Equity Loan

A home equity loan, is a type of second mortgage. Your ‘first’ mortgage is the one you used to purchase your home, but you can use additional loans to borrow against the property if you built up enough equity. A home equity loan can be easier to qualify for than other types of loans because they are secured by your house and typically have a much lower interest rate. Home equity loans allow you to borrow a large lump sum of cash up-front and repay the loan over time with fixed monthly payments. Your interest rate can be set when you borrow and remain fixed for the life of your loan. Home equity loan interest payments may also be 100% tax deductible, which may not be the case with personal loans or credit card interest payments. Therefore, consult your tax advisor to see if you qualify saving you even more on borrowed interest.

Home Equity Line of Credit

A home equity line of credit, also known as HELOC, is a line of credit secured by your home that gives you a revolving credit line for large expenses or to consolidate high-interest rate debt. A home equity line of credit rate is much lower than those charged by credit card companies and short-term personal loan providers. When you borrow with a home equity line of credit, you only borrow what you need. A home equity line of credit allows you to borrow multiple times after you get approved and only pay interest on the amount that you actually use from your pool of available money. By using a home equity line of credit to pay off higher-interest debts, you can pay of debt more slowly without struggling to keep up with rising interest charges, creating wiggle room in your budget.

Home Improvement Loan

A secured home improvement loan is popular among many homeowners who need money to fix up their house. A secured home improvement loan typically has lower interest rates, lower monthly payments, and flexibility when it comes to how you use your money. So if you’re in need of a home improvement project, don’t bust your budget, and apply for a home improvement loan.

Whether you have a home improvement project, want to go on vacation, or just enjoy some wiggle room, contact Members Cooperative Credit Union as we have a broad range of solutions to help prevent your budget from busting.