To get you started, here are some suggested lifestyle changes that will help you to economize. Be sure to allot whatever you save for your credit card payments:
Use cash or your debit card. You should avoid using credit cards. Keep one low-interest rate card for emergencies only. Cancel the other cards so that you will not be tempted to use them.
Overtime pays off. If that is not an option for you, apply for a second job. Do you have a skill you can impart to others? Try moonlighting.
Sell what you don’t need. Go through your home, gather up whatever is collecting dust, and hold a garage sale or try selling them through such on-line sites as eBay.
Stay busy. Remove the temptation to spend unnecessarily by using your free time more productively – learn a new skill, focus on your physical fitness, develop a hobby.
Cut down on restaurants, or avoid them altogether, until you’re free and clear – then go out and celebrate.
Keep phone costs as low as possible. The competition for your business is fierce, so be sure to shop around to get the lowest rate possible. Consider long-distance cards as opposed to long-distance service. You pay as you go, and could save yourself a lot of money. Review your cell phone bills too. If you have a lot of unused minutes, cut back for a lower monthly payment.
Do not waste money on nonessential items. You will only keep yourself in debt. Stop spending money on such things as costly gifts, new clothing, jewelry, CDs, video games, new gadgets and so on until you are free and clear.
Plan vacations at home and explore all the ways you can have low-cost fun with your family locally.
Keep groceries under control. Shop with a list, and don’t forget to clip coupons as the savings can really add up. Place them in an envelope and carry them with you so you’re always prepared to take advantage of a good buy. Try meatless meals and generic brands. Also, don’t shop when you’re hungry, as it’s a sure way to go over budget.
Keep your utility costs down. Turn off lights and fans when you’re not using them. Conserve fuel and electricity by raising the thermostat in summer, and lowering it in the winter. Save money on water bills by taking shorter showers, watering your lawn less frequently and taking care of any leaks promptly. Contact your local utility to find out how you can make your home energy-efficient so that you can cut down on costs as much as possible.
How can you save on housing? Interest rates are very low right now. If you own your home, and if your mortgage is more than a year old, try refinancing, as your monthly savings could be substantial. If you rent, you might want to consider moving to less expensive quarters, or finding a roommate.
Save money on transportation. If you drive to work, gas and parking can be very costly. Look into car-pooling and public transportation instead. What about refinancing your existing auto loan? This could save you some cash too. Review your auto insurance and think about raising your deductibles. If your vehicle has seen better days, then you should reconsider the extra money you are spending on collision coverage.
Pay down the highest-rate credit card first. When you focus on your balances in order, from the highest interest rate to the lowest, you will get your debt paid off faster. If you have two cards, for example, one at 15% and one at 12%, pay as much as you can on the card with the higher rate, by applying whatever you’ve saved from economizing, along with any tax refunds, belt-tightening, raises, second jobs, overtime, and so on. Pay the minimum on the lower rate card; once the 15% card reaches a zero balance, switch your efforts to the 12% card.
Automate your Payments. It’s easier than forcing yourself to write a check each month, and you won’t spend the funds elsewhere if they have already been allocated. The money you specify is withdrawn from your checking account regularly as you direct. An advantage is that your payments will be consistent and on time. No more late fees!
Watch your Interest Rates. With lower rates, you get a lot more mileage out of your money, because more of it is applied to the balance. As a result, you get rid of your debt much faster. If your rate is too high, call the creditor and ask for a lower one. This approach is successful for many consumers. You may also want to consider a balance transfer.
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