5 Ways To Try And Reduce Your Debts And Outgoings

Anyone that has a high level of debt or a number of creditors to pay off each month will know how stressful and difficult financial management can be. However, for those crippling themselves with monthly outgoing as a result of high debt levels there are some steps that could help to reduce the amount that you have to pay out each month, as well as reducing overall interest paid on your debts.

1. See where you can make cutback’s on your outgoing’s. Look at cutting back on little luxuries such as eating out at lunch each day rather than taking sandwiches to work with you. Also cut out any unnecessary expenditure, such as subscriptions and memberships that may no longer be of much use to you. It is surprising how much you can claw back through a number of small savings each month, and this can then be applied towards your smaller debts such as credit and store cards in order to clear them more quickly.

2. Make sure that you are aware of exactly what is coming in and going out of your account each month. Trying to manage your finances and prioritize on paying off debt is impossible if you don’t keep a proper track of your income and outgoing’s. List down every little payment that goes out of your account so you know exactly how much you can afford to spend or put towards clearing your debts a little faster.

3. Consider consolidating your debts. By consolidating smaller debts with one larger loan you can reduce the number of repayments you have to make each month, cut back on the number of creditors to whom you have to pay interest, and dramatically reduce the amount that you pay out each month. For homeowners, a secured loan could be the ideal solution, as this can be spread over a longer period and this helps to keep monthly repayments down. You should be aware though, that by taking finance over a longer period, this would mean you pay back interest for longer. However, if the interest rate is lass than what you currently pay, and lower monthly payments means that you have more disposable income to spend, it would serve to prevent it from being necessary that you need to take on extra borrowing as you will have spare money each month to either build up savings and be able to afford things which you made want to purchase, with out borrowing additional money.

4. Try and clear your overdraft. If you have an overdraft with your bank, and you find yourself reaching the limit every month, one small transaction is all it will take to push you over the limit – and of course this means hefty bank charges being added to your account. By ensuring that you keep your overdraft at a sensible level rather than teetering at the brink of exceeding the limit you can avoid these hefty charges.

5. If you do intend to take out another loan this should be by way of consolidation rather than an addition to your existing finance, as consolidating all your existing credit may help to ease the financial strain and reduce outgoing’s, whereas another added loan will increase both. It may sound obvious but try avoid taking out a loan as an easy solution, as this will only suffice for the short term and you may soon find yourself struggling to keep up with all of your previous debts plus a new loan.

15 Ways Average Person Can Overcome Increasing And Overwhelming Debt

Before sharing these recommendations, I suggest that you have a way of tracking your expenses. This will give you a clear picture of what you spend daily, weekly and/or monthly and aid you in reducing expenses where needed.

1) Accept the fact you are in debt and forgive yourself. If you are in denial, you are more likely to repeat the pattern.

2) Reduce monthly expenditures. For example, once the price of gas increased, our monthly gas costs went from roughly $200 to approximately $450- 500.00. In an effort to reduce our gas costs, I stopped taking miniature trips every day. Also, my husband would drive my car on the weekends because it costs less in gas.

3) If you’re a person that makes several trips to the grocery store during the month, reduce the number of trips to once a month except for fresh vegetables. This will reduce the number of times you have to put gas in the car. Today, it costs more just to leave the house to get groceries as well as going to work.

4) With the increasing utility bill, begin making repairs to your home now such as getting a programmable thermostat and set it to a certain temperature so that it will automatically come on.

5) As an option, temporarily get a second job for supplemental income. If married, this should be the person that has the ability to generate the most income. I do not recommend any Multi-level Marketing opportunities.

6) For a single person in debt – if you are off on weekends, temporarily get a weekend job and put those funds towards the bills along with your regular income.

7) If you have a cell phone and a regular phone that both have long distance, re-evaluate having both phones. It can get expensive to have both with long distance. Maybe you can remove the regular phone and just use your cell phone if most people call you on that number.

8. If you are a stay at home mom, in my opinion the kids should not be going to daycare. This is an unnecessary expense.

9) Be sensible about your expenditures when it comes to your children. For example, a six month old baby does not need name brand clothing. They need to be clothed. Suggest getting into ‘mommy group’ where you and your friends can swap clothing based on gender and age. I have a couple of moms that I swap clothes with and this saves all of us from having to shop at the store.

10) Grooming expenses for adults: do you really need to get your nails done every week? Could you put that money towards a bill? If you are getting your hair done whether it is a weave, perm, braids or tinting every week – do you need to go to a high end salon or could you go Great Clips for the same thing? I am not saying do not pamper yourself; however, as times get tougher what is the necessity?

11) Maintaining your vehicle is a necessity, but going to a car wash every week is not. You can wash your car at home. Re-evaluate how you are spending your money.

12) If you are a person that likes to go out to eat, reduce the amount of times per month you go out to eat. Begin cooking at home since you are buying groceries for the month.

13) Entertainment – whether it is going to the movies, bars or happy hour – these expenses add up. For example going to a matinee is $7.50 a person (for the two of us is $15.00 before we even get food, which would cost us another $15.00) do you really need to see the movie now or could you wait three months and see it on DVD. Netflix is an option.

14) Add up how much you spend at a vending machine per week when you are at work if you work outside the home. Consider taking snacks from home.

15) Health insurance – if you had a job and are using COBRA for health insurance until you have secured another job, seek an alternative health insurance to the COBRA payments. I remember when I first stopped working at the law firm, we utilized COBRA for almost eighteen months and the price increased two times. Prior to the second increase, I located a shared insurance plan and saved us lots of money.

** There has to be some structure during these difficult economical times. However, these times do not have to be so hard that you cannot enjoy life.

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