Ways To Eliminate Debt (part 1)
If you're like many consumers, you are probably struggling to pay your bills
, and/or is already thinking of signing up for one of those debt relief solutions.
But before you look for one, why not try the following first, and if they don't work, do the more serious method. Debt relief or debt consolidation.
I
1. Increase your income. How?
-Request to log in more hours and if that's not possible, try getting a second job, or start a small business that would generate some quick cash.
-Change jobs. You can first try asking for a raise and usually, with it, is increased responsibilities. If that's not agreeable to you or it's not possible on the part of your employer, look for another job. One that would pay more.
-If you're a family person (meaning, not single) try to talk everyone that is able to work to work and contribute to the family's income.
-If you already have any income generating projects going on, say you have invested on something, make sure that they are giving you the maximum returns possible.
2. Organize a sale.
-There are bound to be valuable stuff in your possession. If they do not have that much sentimental value, consider putting them up for sale, either to people that you know would be interested, or via a garage sale. You may also explore selling items online.
-If you have a major asset, like a second house or property, even an extra vehicle, or anything that has a significant value, consider putting them up for a sale. This could be a very good move, especially if you can't afford the payments of that possession anymore, say a car, and you have an alternative transportation anyway. This applies to your home, as well, but don't touch your properties unless you really need to, and you are sure that you have something as an alternative to that item you are selling.
II
1. Consider living in a frugal manner. If you used to spend on entertainment or was a free-spender, now that you are in trouble with your lenders, you would have to quit cold turkey on that habit, at least after you have cleared your debts.
How to cut on spending?
There are a couple of factors to budgeting, one of which is whether you are a high-earner or not, and if you are a family person or single.
If you are the former, meaning, a high-earner but with huge expenses, continue reading. If you earn big money and have a family, you probably are spending for the following:
-house.
-private school, sitter, house help, etc.
-vehicles.
-vacation, camp, etc.
-family time, dinner out, etc.
How to save?
-consider moving into a smaller and less expensive home.
-transfer to public school, see if you or your spouse have family that could help with baby sitting and house keeping/maintainance (at least temporarily) or at a lower cost.
-have your expensive cars traded in for cheaper ones.
-no vacations for a while.
-find ways to have fun at home together rather than go out and spend for movies, dinner, etc.
Of course, those won't save you from your debts instantly, but at least, they would not pile up and bury you deepr. Also, if you live frugally, you would save some money, no matter how little. And the longer you do it, the more you'd see the fruits of your effort. Your little savings put together, overtime, might surprise you.
What are some other ways to save?
-avail of those coupons that offer discounts, watch out for store "sale", buy generic brands (medicine), when you do your grocery-buy in bulk, look for discount stores
-for transportation, save up on gas by car pooling. also, make sure that your vehicle is in tip top shape so it won't eat up gas and maintainance money.
-be conscious of how you use electricity. if it's daylight anyway, try not to switch on the lights, and also never leave them on, if not in use.
-you may also want to discontinue cable tv services or contact your provider and ask for their less expensive service (they usually do not advertise that).
-in line with subscriptions, if you are subscribed to magazines and books, you may want to discontinue those for a while, and check your local library for their own subscription--try borrowing instead of buying.
-prepare home-made lunch/snack for school or work and always just eat at home.
-if you have reached 20% equity, cancel your private mortgage insurance, to avoid paying for it unecessarily. according to federal law (as of July 2009), once you've reached 22% equity, lenders should cancel your PMI, but your lenders won't tell you that, so you have to request for it. at 20% is allowed, especially if you have a good track record.
-live in cash. slowly eliminate the use of credit card or money that you don't owe yet, especially for small purchases.
Ways To Eliminate Debt (part 1)
By: Summer Quinne
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