Are you broke? Do you have a lot of debt and are trying to pay your bills at the same time?
It didn’t seem like a big deal at first. Having lunch out during your work week, and enjoying after work drinks. Not noticing that the bills are adding up, before you know it, there’s this huge collection of bills just waiting to be paid.
Yes, it seems impossible to pay these bills, but there’s still hope.
Tell yourself you’ll do whatever it takes to tackle it. As long as you have a good plan and take action, you’ll get on top of your bills.
The overall plan is simple. You need to remedy your finances from minus zero to at least neutral and from then on to the positive end of the scale.
The 3 biggest expenses we face are:
So let we’ll look at each of these in turn.
The main goal is to have more money. So where can you get more money?
First, by saving and minimizing your costs. Second, by earning more money. When you attack debt from both ends, you’ll get to your goal of paying off your debt and having more money sooner.
When you use the strategies below, you will be able to save more money and pay your bills.
#1 Reduce the interest rate on your debt
Interest on credit card debt is high. You need to whittle down this debt as soon as you can.
Consolidate your debt into one with a main creditor. But make sure the conditions such as interest rates and repayment terms are better than before, and are favorable to you.
There are also banks that offer to waive your interest for a year, if you switch to their credit card. This reduces your amount of debt and helps you to pay off more debt.
#2 Seek professional financial counseling
Look for financial counseling that offers independent advice to help you improve your specific debt situation.
For example, you can be advised on how to set up an effective budget that suits you and works for you.
If you already have a budget, you can be assisted on how to improve it.
(This post contains affiliate links. I may receive a small compensation if you purchase through these links. You do not pay extra. Please read my disclosure policy. Thanks for helping us to continue providing free and useful information to help everyone).
The National Foundation for Credit Counseling offers free or lost cost advice relating to:
-Credit and debt counseling
-Student loan debt counseling
-Debt management plans
-Credit report reviews
Another organization, ConsumerCredit.com, offers free budget advice and financial counseling.
#3 Negotiate with your creditors
The article gives valuable information and advice.
For instance, did you know that “your income is exempt from collection because it comes from a protected source, such as Social Security, Public Assistance, the Veterans Administration, child support, or a pension” (New Economy Project).
#4 Get extra money from your property
If you’re a property owner and are thinking of downsizing, it’ll take time.
Before you can sell your house or apartment, you’ll need time to prepare your house and your garden for sale. How many of us live in a tidy spotless home with a tidy garden as well?
The reality is your home is more likely to be messy, cluttered and not super clean. And if you have a garden, it’s probably overcome by weeds.
As a short term solution, take in boarders, share the rent with flatmates or sign up for AirBnB. This helps to increase your income sooner.
#5 Consider moving in with your parents
If the time to commute between your workplace and your parents’ place is reasonable, and your parents are understanding, you can ask to stay with them till your financial situation improves.
This will make a huge difference, as rent or mortgage payments are a major part of your expenses.
#6 Sell unneeded stuff
Gather your unused items at home and sell them on eBay, Craigslist or similar marketplaces.
This post shows you what you can sell for more money and where you can sell them. It includes how you can get instant cash from this machine if it accepts your item. This gets you more cash, and removes unwanted items lying around your place.
The beauty of it is that removing your clutter helps keep your house tidy, should you choose to sell it further down the road.
#7 Do side hustles
Take up side hustles, but not just any side hustles.Consider those you can start ASAP.
Most of the side hustles in Best Side Hustles to make Money Part 1 and Best Side Hustles to make Money Part 2 don’t require special skills to get started. In fact, you can start making some money very soon.
#8 Change your spending habits
Changing your spending habits is not an option. It’s a must. You need to rethink your spending habits.
Use the tips in Part 1 of How You can transform yourself from a Super Spender into a Super Saver to find out about harmful spending habits that are costing many of us thousands.
Read it now. It’ll inspire you to consider your own spending habits which you may be costing you tons of money.
#9 Cut out the spending on frills now
Ask yourself,”What is it that I don’t need at all?”
Do you really need to buy lottery tickets? Or gym memberships? You can easily exercise by going for walks or by doing push ups or sit ups at home.
Whatever you can cut out completely, do it now.
If it’s hard to give up, write down a plan and stick to it, to make sure that you are reducing the number of lottery tickets you are buying, or the number of cigarettes that you’re smoking (Join a smoking cessation group if you need support to quit smoking).
Always ask yourself if what you’re spending money on is a want or a need.
See how you can use the 30-day rule to avoid spending on unnecessary stuff.
#10 Reduce your power usage
What are the things you can cut down on or economize?
For example, there’re many ways cut down on your energy bills.
Simple ways include switching lights off when you’re not in the room. You can also replace your lighting with energy saving compact fluorescent lights.
My family uses all of these 40 frugal tips to save up to 50%of out power bills. Read about how we achieve this.
In Part 1 of How to Save Power and Slash Your Electric Bills, you’ll get clever tips to keep warm in winter and boost your savings at the same time.
In Part 2, you can use these evergreen tips to save power the whole year round.
What you can also do is to switch over to an energy supplier.
This alone can save you hundreds. Make sure you are aware of all the requirements of the switch. Sometimes there are fees involved. You need to compare the energy companies.
(This post contains affiliate links. I may receive a small compensation if you purchase through these links. You do not pay extra. Please read my disclosure policy.Thanks for helping us to continue providing you with useful free information. Part of the proceeds has been donated to the South Island Wildlife Hospital.)
Did you know OhmConnect pay their users to save energy once a week? You’ll need to connect your utility account and this service is available to to 95% of the homes in California.
#11 Save your water bill
Do you really need to take showers every day?
If you live in a cool climate, consider showering on alternate days instead.
This helps to reduce the time needed to heat up your hot water. In this way we save not just the cost of water, but also heating bills.
#12 Save on transport
Don’t make unnecessary car trips. If you could walk to the shop in 10 to 15 minutes, get some exercise doing that.
Save money on gas, help the environment and improve your health.
Would cutting down to one family car work for you?
It can really help as you save on gas, repair and maintenance, road costs and so on. Better still you can switch to a bike or scooter.
Carpooling is another great way to reduce your costs on transport.
You may like to consider public transport if it’s really cheaper. In my town, it actually costs not much more to drive a car than to use public transport.
If you still need a car, find out these 12 guaranteed ways for you to save thousands of dollars on car expenses.
One of the ways is 100% free and works 100% of the time. These tips are perfect for any motorist to use.
It might be fun using an electric scooter, but you pay for the privilege, whether you own one or are renting one.
#13 Use Cash Only
This works well for some folks, as the act of handing over real money makes it painful. This helps them to curb their spending.
Have you heard of the Cash Envelope System? Read this post where I discuss the Cash Envelope System and its pros and cons, so you’ll know if it’ll work for you.
#14 Eat out less
Unless it’s cheap, don’t eat out much until your situation improves.
Remind yourself it’s temporary till you get a hold of your finances.
When you get back on track, you may want to limit the number of times you eat out.
My family has gotten used to eating out less. We used to eat out once a week, but now we eat out about once a month or less, saving us a good amount of money 🙂
#15 Do smarter grocery shopping
Groceries are another big expense.
You need to be careful when you go grocery shopping.
Get my 61 Ways to Cut Your grocery Bills in Half. It’s jam-packed with lots of awesome tips for you to save big on groceries.
#16 Claim cashback rewards
Don’t forget to take advantage of cashback websites.
You get a portion of your money back when you make online purchases.
#17 Get a support person
Get a family friend or a trusted family member to help make you accountable for your spending.
Write down your goals – state what you want to cut down on or stop buying. Get them to ask you regularly about how you are meeting your goals.
#18 Get and use loyalty cards
Make full use of your loyalty cards. I have store loyalty cards that allow me great discounts.You can also try to do your shopping on special promotion days.
I subscribe to my local supermarket news alert. So I’m able to grab great bargains on special promotion days like Thrifty Thursdays and Frugal Fridays.
#19 Get some money back with Paribus
Did you know that you can still get refunds AFTER you’ve purchased?
When Paribus is linked to your email, it scans for receipts from your purchases. Should there be a price drop, it’ll automatically get you the refunds you’re entitled to. (The refund period is usually 2 weeks).
#20 Use cheaper substitutes
If you’re using premium brands for anything like skincare products, beauty products, or branded food products, switch to generic brands or supermarket brands.
#21 Ditch costly hobbies
Stop your costly hobbies like photography till you get back on track. Then rethink whether you may want to continue with them or switch to cost effective hobbies.
#22 Put off making big purchases and postpone your vacation
You can enjoy life without spending tons of money. You don’t always have to go for a vacation.
These 100 Ways to Enjoy Life to the Fullest helps you to enjoy life without spending much money.
If having a new kitchen is your dream, postpone it. This is not an essential. Make do with your older kitchen for now. Get your new kitchen when you can afford it later on.
#23 Save on pet ownership costs
Did you realize that keeping pets is an expense? Ask a friend or family member if they can take over for the time being.
You can always take your pet back later. But if need be, you must make that tough decision to give up your pet. Think of your wallet. Think of your pet’s welfare.
What to do when you can’t make the minimum payments will give you more ideas how you can pay your bills.
Bonus Tip : Dave Ramsey’s video on The Secret to NOT Being broke.
Don’t let having big debts or being broke get you down. Yes, it can appear bleak. Take deep breaths – tell yourself you can do it. Why?
Because now you have a plan, you know what to do.
So, take action and keep tracking your progress. Keep chipping away at your debt. It may look impossible now, but when you take small consistent steps every day, you’ll surely see remarkable results much sooner than you think.
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