No matter what, we all have some amount of debt to our name. Blame the lackluster economy, the ease of getting a credit card or the ever rising real estate market- we’re all pretty much in the red. But, if there is a way to get into debt, there must also be a way out of it. Actually, there is. One of the most effective ways to pay off debt faster is to cut spending in everyday life. Here are three major expense areas and how to cut spending in each to get out of debt faster.
For almost all of us, our homes and cars comprise our biggest expenses. Be it rent, mortgages, car payments or insurance, home expenses does take up the largest chunk of our paychecks. So, doesn’t it make sense that cutting costs here could help you pay off debt faster? Here’s how you can cut expenses with home costs:
- Double up on Payments: If you are carrying a mortgage, try making bi-weekly payments. This splits your mortgage payment into two and allows you to pay off debt faster than your amortization term.
- Always look for Deals: How about always shopping around when your insurance comes up for renewal or you see a lower mortgage interest rate. A little bit of legwork and phone time can save you a lot of money over time.
- Utilities: Almost all areas have multiple service providers. Negotiate with utility providers for electricity and heating rates. Also, consider what utilities you truly need- do you watch enough cable to pay $100/month for it? Consider cancelling what you don’t need.
Food…food…who doesn’t love good food? Food is often an essential portion of our everyday lives and integral to a lot of special days. It brings and keeps our families and friends together. Many times, though, food also makes up a major portion of our monthly expenses and can drive us deeper into debt. Consider cutting costs here to pay off debt faster. Here’s how you can cut food costs:
- Eat at home: On average, an American family eats out about ten times a month. If on average, you spend a conservative $10 a person, a family of four would be looking at spending an average of $600 a month- and that’s only for one meal! Choose to eat at home most of the time- a week of groceries can end up costing you about $100 a week, $400 a month- saving you tons of money over time. In addition, meals don’t have to take you forever to make- healthy dinners can take you less than 30 minutes to make and taking leftovers for lunch the next day can save you even more.
- Couponing: Some may think of couponing as tacky, but there is really so much you can save with coupons that you may be losing out on precious savings if you are not using coupons. There are several grocery chains that will also match your coupons, giving you double savings that can get you free home supplies. Can you really afford not to coupon?
- Know what’s in Season: One of the easiest ways to reduce grocery costs is to know what fresh foods are in season and buy what is freshly available to you.
Of course, we all need entertainment every now and then. Whether it’s a movie, a show or a family trip, we all need a break from our everyday lives. But, a break from everyday life does not need to break the bank and there are some great breaks you can take for next to nothing. This will get you a break from life and help you pay off debt faster. Here’s how:
- Look for Free: Actually, free events are not as hard to find as you may think. Almost every city or town hosts free events that you can enjoy. For example, some city centers host free dance classes or fitness classes once a week. This can give you a great break at little to no cost to you. Also, if you are paying for some fitness classes, you can also look to get it reimbursed from your insurance companies as they are considered part of preventative care.
- Socialize Wisely: Yes, you do need to get together with friends, but you don’t really need to splurge on a night out. How about cashing in on happy hours or free events around town.
- Look for last minute deals: If you are not particular on where you are going, try picking up last minute deals on trips. That gives you a great deal and family time.
Remember that every dollar counts and to pay off debt faster, it does take a strong commitment on your part. Reducing expenses does take a little bit of compromise but in the long run, being debt free is a powerful goal….hopefully powerful enough to not make you feel too bad about the things you had to do to pay your debt off.