Having Trouble With Debt Management? Help Is Here!
The startling truth is that 80% of Americans are in debt. That ranges from a small loan to millions of dollars. Almost anyone who went to college has a student loan, and most parents are in debt helping to support their children. ‘Debt’ is such a horrible word, it implies poverty and a disregard for control when it comes to spending. However, most people get into debt because they had to and debt management isn’t too hard.
Obviously, the ideal situation is to not have a loan or credit cards, to be able to live comfortably within our means, but with the average outgoings for a household nearly matching the average income, it is easy to see where the extra money is needed.
It’s not all doom and gloom, being in debt doesn’t mean the end of the world, in fact, there are many ways to manage, and prevent yourself from falling back into it.
The obvious one debt management tip is to save your money, get into the habit of putting a set amount of money aside each month, this cushion will help you to pay for those surprise bills, will see you through some tough times and can pay for that holiday you’ve been hoping for.
Saving doesn’t have to break the bank, come up with a figure that you can reasonably put aside – don’t strain your finances. And resist the urge to spend all your saving in one go – if you’re saving for a holiday that costs $500, then save $700, you have a safety blanket in case something happens while you’re away.
Try and pick a savings account with a high-interest rate, that way your money will make money without you having to do anything. Compare bank rates at mybanktraker.com.
If debt management is something you don’t want to have to think about or is a daunting figure – then perhaps you look into a debt consolidation loan. This sounds strange, but it may work out that one loan is easier to handle than lots of smaller ones. Or you may have some that are high interest and are only growing in size. A consolidation loan is typically low interest so can be chipped away at nicely over time, learn more at debtconsolidationloans.com.
Your credit score is as important while you’re in debt as when you’re out of it. Raising your credit can be easy – paying bills on time and keeping good records helps a lot. Actually paying off your debts in time can help your credit – meeting any fiscal deadline is important for a healthy credit score.
Cut up those Cards
This one may hurt a little – but those credit cards have to go. Either lock them up until the debt is cleared and have a satisfying moment with the scissors, or hack them up straight away to avoid temptation. Try and be ruthless about it, like ripping off a band-aid, but if you know that you will have zero saving for a while, maybe keep one with a small balance just until you have a small safety net saved up – but this is your safety until then, so no needless spending.
In the theme of being ruthless, it’s time to look at what you’re spending where. We all have things we buy just because, and there are always ways to cut back on the extra spending. Is there a gym membership you haven’t got round to using since new year when you signed up? Do you need a monthly manicure, or can you do it at home? Can you start car-sharing to work, or take public transport? Sit down and make a list of all the things you spend your money on, and work out which ones you can cut out.
Whether you do it by hand, or a spreadsheet, or use an envelope system, budgeting your money can only help you to control it. If you know you only have $40 to spend on gas this week, then that’s all you have. It may take some time to get used to, but once you do, you never go back. The day you cash your paycheck, sit down and calculate everything, that way you don’t have time to spend anything before you work out what you can spend.
We all love free things, from a sample in the grocery store to a coupon for a free dessert with dinner. Now is the time to keep those eyes peeled for all the free and money-off things you can find. Buy things on offer or in bulk – it’ll work out that some of it will be free. Check out sites like coupongrabber.com for deals. Look out for deals online for restaurants and days out – just because you’re saving doesn’t mean you can’t go out and enjoy life. There are many places to take you family on a free or cheap day out – you just need to be more creative.
This applies to many things; plan when you’ll need to spend out big chunks like car servicing and Thanksgiving. Prep for birthdays and Christmas throughout the year by buying year round in the sales. Prepare your lunches at home rather than buying while out. Make a meal plan for the week, buy only the food you need, and stick to it. The planning and organizing of your life will become second nature and will help keep your life stress-free, let alone debt-free.
Are you one of those people who has a garage or attic full of things you’ll never use again? Baby toys from years ago, or multiple tools that all do the same thing? Have a mass sort out of the house, and you’ll find masses of things you don’t need, and probably forgot you owned. Have a yard sale, or sell them online, but you’ll be surprised with how much you can make out of the old junk lying around the house. Start enjoying debt management today!