Help Reduce or Eliminate Debt: Do Nothing
Doing nothing is clearly a choice. Procrastination is not an excuse; it's a choice. So if you are in debt, you can get yourself out. However, you MUST do something!
Let's be clear on "doing something." That "something" must be pro-active toward reducing or eliminating your debt. It's very similar to a diet. If you want to lose weight, but don't change your eating habits, you will not lose weight. What's interesting is that for losing weight you don't have to stop eating, you just have to choose the correct foods to eat. Eating less certainly works too!
Whereas when it comes to being in debt, you HAVE to stop spending as much as you make in order to get out of debt. Changing where you spend your money doesn't have any bottom line affect.
Help Reduce or Eliminate Debt: Decrease Your Expenses.
You have two choices here: take out all of your receipts, look at your checkbook/debit card or credit card statements for ALL of the entries for the past 60 days. Choice number two is to write your expenditures down over the next 60 days, but then you are 60 days from starting this process.
List these items on a separate page. And beside each item indicate whether or not these purchases were a Need, a Want, or Desire. A need is something in the category of (tap)water not (bottled) water or (good) food not (junk) food, rent or electricity.
Want's are those "next level" purchases. You needed to send flowers. Carnations would satisfy the need, but you really want to send a nice bouquet. Again it's a choice based on your ability to pay (without your credit card).
Desires are the next level up. Carnations represent needs, a bouquet represents a want, a dozen long-stem red roses represents the desire of the purchase.
Make a new list of just those items you identified as needs. Add up the total spending of your needs. Remember this is over 60 days, so divide the total by 2 for your average monthly expenditures. Is the total greater than or less than your monthly income? If your total is less than your income GREAT! Just cut out all the other non-essential purchases and you are on your way. With the money you have left over, pay down on debts you owed.
One more much over-looked action: Cut Up Your Credit Cards. Do Not use your credit card for non-essential purchases.
But if you still pay out more than your income you have two options: cut down your NEEDS even further or Increase your income.
Help Reduce or Eliminate Debt: Increase Your Income.
Much could be written here about increasing income, but that is for another article. Suffice it to say that increasing your income so that your income is greater than you expenses stops you from making more debt. Don't spend all of your excess; pay off some of your debt each month.
Future articles will discuss budgeting techniques.
Doing nothing is clearly a choice. Procrastination is not an excuse; it's a choice. So if you are in debt, you can get yourself out. However, you MUST do something!
Let's be clear on "doing something." That "something" must be pro-active toward reducing or eliminating your debt. It's very similar to a diet. If you want to lose weight, but don't change your eating habits, you will not lose weight. What's interesting is that for losing weight you don't have to stop eating, you just have to choose the correct foods to eat. Eating less certainly works too!
Whereas when it comes to being in debt, you HAVE to stop spending as much as you make in order to get out of debt. Changing where you spend your money doesn't have any bottom line affect.
Help Reduce or Eliminate Debt: Decrease Your Expenses.
You have two choices here: take out all of your receipts, look at your checkbook/debit card or credit card statements for ALL of the entries for the past 60 days. Choice number two is to write your expenditures down over the next 60 days, but then you are 60 days from starting this process.
List these items on a separate page. And beside each item indicate whether or not these purchases were a Need, a Want, or Desire. A need is something in the category of (tap)water not (bottled) water or (good) food not (junk) food, rent or electricity.
Want's are those "next level" purchases. You needed to send flowers. Carnations would satisfy the need, but you really want to send a nice bouquet. Again it's a choice based on your ability to pay (without your credit card).
Desires are the next level up. Carnations represent needs, a bouquet represents a want, a dozen long-stem red roses represents the desire of the purchase.
Make a new list of just those items you identified as needs. Add up the total spending of your needs. Remember this is over 60 days, so divide the total by 2 for your average monthly expenditures. Is the total greater than or less than your monthly income? If your total is less than your income GREAT! Just cut out all the other non-essential purchases and you are on your way. With the money you have left over, pay down on debts you owed.
One more much over-looked action: Cut Up Your Credit Cards. Do Not use your credit card for non-essential purchases.
But if you still pay out more than your income you have two options: cut down your NEEDS even further or Increase your income.
Help Reduce or Eliminate Debt: Increase Your Income.
Much could be written here about increasing income, but that is for another article. Suffice it to say that increasing your income so that your income is greater than you expenses stops you from making more debt. Don't spend all of your excess; pay off some of your debt each month.
Future articles will discuss budgeting techniques.
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