If you are up to your eyeballs in debt, the fantasy of some easy fixes to achieve a debt free life can suck you right in. But, the hard fact about these quick fixes is that they are no magic bullets. In fact, you don’t need a magical wand at all in the first place.
You need a game plan, and once you have that, you will not likely to wind up in trouble ever again. Sometimes, life teaches us many valuable lessons. So, lets take it as an opportunity to take our lessons on smart spending. This is not the time to wallow in despair. This is the time when you just cannot afford to make mistakes. Now is the time to learn how to live on what you earn.
Don’t Hate The B-Word
Budgeting is the key factor of your game plan here. So, get into the habit of budgeting. You have to hang on to the right attitude. The B-word looks scary when you look at it as bigger savings and no fun. But if you look at it as a way of helping you spend less and enjoy more, it can definitely turn the picture around. You can get started in a very simple way.
Keep Track Of All Your Expenditure For 2-4 Weeks
Just keep track of where the money goes for the next couple of weeks. You don’t have to do this forever. You can use your credit card and debit card statements to help you out in this context. Just do it for a month. You will easily be able to find the small holes your hard-earned cash is leaking out from.
The objective here is to look for surprises. You are looking for those “wow” moments – you will be surprised to see how much you have been spending on restaurant meals, on lattes and fast food, on high-speed Internet service, on premium cable-TV channels, or even the change that’s put in the parking meters, and other things like that. These are the small things that we never pay attention to. But, aren’t they making a big difference? Now that you know where the cash is slipping out from, all you have to do is just plug these holes up. This will easily get you another $200-$300 a month that you never thought you had.
Use Your Budget To Develop A Game Plan For Debt Reduction
Now that you have found that extra cash, the next step is to plan your strategies to pay off payday loans to achieve a debt free life.
- You can start by listing all your bills in decreasing order – first the dues with the highest interest rates and then the ones with lower rates. Start paying the amounts from the top with the extra money that you have while making on-time minimum payments to the others.
- Earn more. In my case, I took on some extra freelance work that really helped me to get just a bit more dough every month. So, this is the time to work overtime. If not, try to get a second (part-time) job.
- If you do not have any way to earn more, you will have no other option but to learn how to spend less. Go in for cash payments only. Make sure to forget your cards at home – in a safe place. If the cards are there in your wallet, you are surely going to use them.
Even if you pay off all your borrowed sums, I think it is a good idea to revisit this budgeting approach at least once a year just to see where you’re going. You will know whether or not you are on the right track.
Once you discover the extra cash that you can save, you can stock it for emergency, retirement fund, or other such things. You will still have some amount left that you can spend with a relaxed mind because you know that you are saving up too.
To make the best use of your money and pay off all your bills at a faster pace, opt for debt consolidation to consolidate your loans into one single loan. It has helped many people achieve a debt free life. Mine is the biggest example, as I erased $129,000 mortgage in less than five years. My friend Lizzy paid off about $46,000 in credit cards in just twelve months. You can also be one of those debt-payoff champions. All you have to do is to follow the smart spending strategies and make the right debt consolidation moves before it is too late.
