If you are like 80 percent of the rest of America, you are struggling with some form of debt. Like many, you probably have a credit card, maybe several. You hold a balance, and pay the minimum, and feel like you are sinking in a quicksand of debt. Well, it’s high time for you to grab the rope and get out of debt, starting today. Follow these 5 steps, and you will be well on your way to being debt free.
1. Dear Diary…
No, not that kind of diary. Start a spending diary. Write down every bill that you pay each month. One group should be bills paid in set amounts, like rent, mortgage payment, car insurance, that stay the same each month. Then the next group should contain payments that fluctuate, but still need to be paid, like your utility bill. Then make a list of monthly expenses that you need such as groceries, and gas. All of the above lists are necessities, that you must have. Finally, start a list of other things you spend money on, such as trips to the drive through, magazine subscriptions, new clothing, entertainment, etc. These are called luxuries. This is the first place you should look to find extra cash leaks. For example, if your daily routine is to stop by a certain donut drive thru for your morning caffeine, make your coffee at home, and over a month you could create an extra $100 if your daily trip costs roughly $3.00. That’s around $1,200 per year! Would that amount help you to get out of debt over time? I think so! And that’s just by changing your coffee!
2. Stick to the List!
The Grocery List that is. If you keep track of the extra things that you buy in the grocery store each week, that you had not originally planned to buy, I’d be willing to bet that by sticking to a list, and maybe only bringing enough cash (leaving the card at home) with you to cover those items, you’d discover an extra $25-$200 each month! (So, that’s a conservative $600 per year…) Yes, those buy one get one free deals are great, but only if they are on your list, or you use them regularly. Grocery stores are here to make money, and they know that impulse buys are very easy to create, and people are very easily sold. Believe me, I’m guilty of this offense! By the way, do not, I repeat do NOT do your grocery shopping on an empty stomach. Everything looks enticing when your stomach is growling.
3. Raise the Bar.
Set an amount that you will pay on your credit card each month, say, $100 above the minimum, and stick to it. Hey, you found that extra cash already, so don’t look at me like you don’t know where you could possibly find that amount of money!
4. Open a Trendy New Restaurant.
Chez Vous – Your house, that is. Bring bag lunches, and cook quick meals at home. Utilize your freezer. Make a lasagna and freeze half. Hey, then you don’t have to cook every night! If you don’t know how to cook, now is the time to learn. Invest $10 in yourself, and buy a cookbook that has freezer recipes – ones that taste like you just made them. Cook at home, and not only will you get out of debt faster, you may lose some weight in the process. Hey, I’m not judging, but most of us wouldn’t be disappointed to see smaller numbers on the scale.
5. Champagne Taste, Hamburger Budget.
Don’t spend more than you earn. I know that sounds logical, but you’d be surprised how many people live outside of their means. Stick to your budget, and if there’s extra money after taking care of your expenses, then, by all means reward yourself – conservatively, of course.
So, keep track of your income and expenses, make lists, make a few changes to your routine, and you will get out of debt faster than you ever dreamed.
You Can Get Out of Debt!