It may seem obvious, but even when in financial dire straits, people sometimes have a sense of entitlement about spending. Stay on track where spending is concerned by getting in the mindset of living below your means, not just within your means. For example, go grocery shopping with a list, and don't buy anything that isn't on your list (even if you think you really want it). Or set aside a dollar amount per week for groceries that's your spending limit. Make shopping a structured affair so you aren't prone to impulse buys.
If you eat breakfast on the go and spend $6 a day, five days a week, you're looking at spending $120 per month on your morning meal. If you wake up 30 minutes earlier, giving yourself time to eat a bowl of cereal, or even taking breakfast from home to the office, you're sure to save.
Budgeting is a very important aspect to getting out of debt, especially if you don't want to incur further debt. First, add up all of your monthly essential expenses (rent or mortgage, phone bill, daycare, etc.). Compare that against your monthly income and look at what's left for non-essential items (eating out, manicures, lattes). Ask yourself which of these non-essential items you really want to keep and prioritize your discretionary spending. Ideally, set aside a small amount for non-essential items and put anything left over toward paying down your dept.
Be reasonable. You shouldn't put yourself on such a strict financial diet that you don't stick to it.
If you borrow for something fleeting (e.g., a one week all-inclusive vacation) and it will take you more than a year to pay it back, don't do it. The debt you incur (and the stress that goes with it) won't be worth the short-term gratification. Try to match the repayment term to the life of that purchase.
People who get themselves into debt have often bought things they don't need. Why not have a garage sale to sell off some of those items? Even if it doesn't make back even half of what you spent in the first place, you will feel better knowing you've made a big step in the right direction. Depending on your schedule, think about getting a part-time job. Even working an extra 10 hours a week can make a big difference.
Another option is to start a side business out of your home. You can make extra money by doing something you love and charging for it. Piano player? Offer lessons. A whiz at writing resumes that get noticed? Offer to help others. Every little bit counts.
If your debt becomes too unmanageable, you may need to think about downsizing your home or car. This could mean something as simple as renting a smaller apartment in a less trendy area or selling your larger home (that you can no longer maintain) to move into a smaller one. The same thing applies to cars. It's never going to be worth the same as when you bought it, but think about trading your gas guzzler for something that will get you more mileage for your money.
The lower the rate the less money you're paying in interest. It can be possible to combine credit card debt and a car loan, for example (and if you have reasonable repayment history) inquire about making one payment every month on everything at a reduced rate. Check with different banks to compare rates to see if this is an option for you.
Putting away just $25 a week for one year adds up to $1,200 in savings. Up that to $50 and you can save $2,400 in a year. It may not seem like a lot, but the more you can put away, the easier it will be to pull yourself out of debt.
Debt can be scary, but managing it is doable if you commit to making some lifestyle changes and shifting your focus from spending to saving. Remember that everything you can do to get out of debt is a step to a happier, more stress-free life.
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