Trying to claw your way out of debt?
These 5 useful tips really work in helping your household to reduce your debts and liberate your finances!
Household debt has become an unavoidable reality for many households.
The cost of living continues to climb every year.
However, our wages don’t necessarily rise to meet it.
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As such, families are left with no choice but to rely on various forms of credit to get by.
However, when debts start to mount, they can become much harder to manage.
With a little know-how, discipline and consistency, your household can steadily reduce your debts and eventually live the dream of becoming debt free!
Start out with clear goals
Like anything in life, escaping debt is much easier when you have clear and achievable goals in mind.
The more specific and realistic your goals, the more likely you are to achieve them.
For instance “I will become debt free by next year” is a noble goal, but it lacks the specificity that will help you to achieve it.
However, “I will pay off my credit card by September” or “I will put an extra $100 into my savings every month” are clear and specific goals which will contribute towards your becoming debt-free.
Get proactive with your budget
Managing and reducing your household debts are virtually impossible without a budget.
If you don’t already have a household budget, start using one of these templates today.
They will work as long as you stick to them.
A household budget makes it much easier for you to manage your spending and be more cognizant of your income.
However, it’s also important to be proactive in managing your budget.
Your household circumstances may change frequently, and if you keep your budget set in stone, you may not be using it to ots full potential.
For instance, if you get a bonus one month, you may be able to pay more into your savings or pay off more of your debts.
Keep better track of your spending
Do you ever recoil at the sight of your bank statement.
Do you scan through the list of transactions trying to find a particularly large or extravagant expense?
Don’t be surprised if you don’t find one!
When it comes to our spending, it’s rarely the large expenses that cause problems.
It’s the little expenses that quickly add up over time.
The candy bar you pick up on the way home from work.
The latte that you grab to take the edge off your morning.
The takeout you bought because you were too tired or stressed to cook.
Your budget will allow you to keep better track of your spending and spare you any unpleasant surprises when you check your bank statements.
Prioritise your debts and expenses
Another area in which budgeting will help to liberate you from debt is by encouraging you to prioritise your debts and expenses.
Start off with your debts.
Which are you paying the most interest on?
Make larger payments for these debts and you’ll pay them off faster and save yourself from a fortune wasted on interest.
Then take a look at your expenses.
Which are essential?
Set money aside for your rent or mortgage, utilities, fuel, groceries etc.
What’s left is your disposable income.
The money you spend on entertainment, new clothes, gifts, dining out etc.
While these are the things that make your life more enjoyable, you can’t allow them to take priority over our essentials.
Cut back on your subscription services
Speaking of expenses, take a look at your monthly outgoings and think about what could be trimmed down.
For most households, some of the clearest candidates are subscription services.
The subscription model may seem like great value for money when it comes to keeping the household entertained.
But as streaming services become more numerous and studios pull their content from other streamers to put on their own service, households can find themselves with an abundance of subscriptions to get at the content they want to see.
Does your household really need Netflix, Hulu, Disney Plus, Spotify, Apple Music, Amazon Prime and the like?
Did you start any free trials then forget to unsubscribe?
Many households are spending a small fortune on subscription services that they barely use.
Maybe it’s time to quit some or at least put them on hold for a few months.
Debts getting out of control? We’re here to help!
Reducing your debt isn’t easy.
It takes time, discipline and sacrifice.
If you need a helping hand in managing your debts, we’re here to help.
Unline non-profit credit counselling services, our licensed team are able to show you all of the options available to you in reducing your debts and getting the financial fresh start you deserve.
Since we opened up in 1999 we’ve helped over 100,000 Canadians from all walks of life to free themselves from the constant worry of debt.
Call us today on (877)879-4770.
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What Debts are Erased in Bankruptcy?