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Controlling Your Spending
The first thing to do to control debt is to get a handle on your spending. Figure out where and on
what your income is being spent. To do this, separate your expenses into two categories. The
first is everyday expenses (discretionary), the second is required debt payments (nondiscretionary).
Some suggestions for reducing discretionary expenses are to:
1. STOP ALL CREDIT CARD SPENDING (you should only be using them for emergencies)
2. Keep a notebook with you to record even the smallest expense, like coffee in the morning
3. Look for alternative products when shopping at the grocery store
4. Look for alternative grocery stores, discount stores and bulk food clubs
5. Lower the temperature on your hot water heater to 120 degrees F.
6. Lower your thermostat
7. Turn off lights when not in use, use energy efficient lights
8. Look for alternative energy suppliers
9. Look for the lowest gas prices in a reasonable driving distance
10. Keep your car tuned up for fuel efficiency
11. Clip coupons
12. Avoid the Laundromat. If possible buy a washer and dryer (energy efficient ones)
13. Start a garden with your most commonly eaten vegetables in it
14. Eat at home whenever possible
15. Don’t waste leftovers (use re-sealable containers)
16. Bring your lunch to work
17. Buy large items during sales
Make sure you’re giving as little of your income to the IRS as possible every payday byadjusting your
deductions so when tax time comes you owe nothing. Use this extra money to pay down debts
Some suggestions for reducing non-discretionary expenses are to:
Call all your creditors and ask them to lower your interest rates
Transfer your balances to lower interest cards (but be careful to watch the fine print)
Choose a credit card that allows you to earn miles or money. Then simply make charges
to your credit card that you already intend to pay off that month, such as car insurance,
utilities and cable. All of these normal expenses could be charged to your credit card and
paid off that month. You get the miles or money without accumulating debt. Do this only if
you are sure you can pay off your cards balance every month.
Get a debt consolidation loan, but only if you can first change your spending habits (if it
does not extend debt and payments!)
Look for cheaper car and homeowners insurance rates annually
Avoid declaring bankruptcy if at all possible. It will likely put you in a worse situation than you are already
in. Declaring bankruptcy can ruin your credit for a long time and make it almost impossible for you to get
any credit whatsoever if you need it during that time. Declare bankruptcy only if absolutely necessary,
and only after talking to a professional credit counselor about your situation. Many times, they can help
you in ways you never thought of and maybe even help you avoid going the bankruptcy route.
NEED vs. WANT
If you do not understand this concept, you will not succeed in living debt-free..
When you consider making any decision at all regarding spending your money, you need to assess
whether it is something you need to have to survive, or if it is something that is appealing to your
emotions -- something you want -- but that is not necessary for your survival on this Earth.
Ask yourself :
1. Can I live without it?
2. Will the world stop going around if I do not have it?
3. Will it make a big difference in my life if I do have it?
4. Will my life end if I go without this item?
5. Can I find it elsewhere for less money?
6. Can I find it on sale or clearance or used?
Very often, if you decide to wait on a purchase, you'll find you didn't really need it... or want it...
at all!
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