5 Easy Spending Cuts To Eliminate Debt
Being in debt is no fun for anyone. Depending on how much debt you have, what the interest rates are and your personality type, you could very well be losing sleep at night over your debts. This is not healthy for your physical well-being or financial well being.
There are some forms of debt that are understandable, good even, such as a mortgage at a low fixed interest rate or federal student loans, also at low fixed rates, that you can easily afford to pay off over time. A mortgage you can afford is an investment, as are manageable student loans, as they can help you earn your degree and make more money as a college graduate.
However, high interest credit cards, private student loans, car loans and other high-risk forms of debt are not good at all and do nothing to build your equity. Rather they just suck money out of your pocket each month and it’s truly in your best interest to climb out of this type of debt as fast as possible – even if it means taking what could be considered as overt measures.
Here are 5 ways you can cut your spending today and get out of debt.
1. Track Your Expenses
Free web based budget planners and expense trackers, such as popular Mint.com, are a great, accurate way to see where your money is going. Sign up for one of these programs today and start tracking your money by linking your credit card and bank accounts to the secure program. You can’t cut your expenses and get out of debt without first knowing where your money is going.
2. Pack Your Lunch Today and Everyday
If you eat out even a moderate amount you’re spending a lot of money. Gourmet coffee costs dollars, when it could cost cents if you brewed it at home. Sandwiches with bread, meat, cheese, lettuce and a few condiments costs several dollars, when it could cost much less if you made a sandwich at home and took it into work. Just by cutting your eating out money, you’ll most likely be saving at least $100 a month, if not more.
3. Downgrade Your Cell Phone Plan
Most people today have nice phones with an Internet data plan. If you have an unlimited data, minutes and texting plan, you’re probably paying a lot of money for it and you probably don’t need it. Save yourself around $50 a month by calling up your cell phone company and downgrading just one tier below your current plan. Then make sure you watch how much you text, call and surf the web.
If you talk on the phone a lot at home, get a Skype phone or other VOIP solution for unlimited calling in the US and in several other countries. Internet phones are extremely affordable.
4. Cancel Cable/DVR/Etc
Call up your cable company and cancel your cable and DVR subscription and whatever else you’re paying an arm and a leg for. You’ll save a significant amount of money each month by doing this. If you’re a huge movie buff, remember you can always rent and watch movies from your computer these days with an a la cart service, which is much cheaper.
5. Pay $50 More Than Your Minimum Balance On One Account
If you’re carrying high interest debt, you’ll never get out of debt by paying just the minimums. Pick your highest interest account and throw $50 toward the principal balance. Chances are you would have spent that $50 on something not very important and won’t miss it. Do this every month and you’re on your way to getting out of debt.
About the Author
Jessica Drew is a freelance writer and frugal shopping enthusiast who writes about a variety of financial topics such as credit cards, student loans and cheap flights.