As with all things this will only be possible if you are really
disciplined. You must not add to your debt pile or borrow any more money
until you pay off the current cash. Give yourself goals and timeframes
when you'd like to achieve things. For example; to pay my store card off
before Christmas. If that's not realistic then extend the date. You
have to push yourself with this though. You're literally throwing
hundreds of dollars away each month of your hard earned cash. First
thing's first; STOP SPENDING!
1. Cut up those cards!
If you don't have the discipline to refrain from using any store or credit cards then they have to be cut up. It's too tempting to say 'I need that shirt; it's only $20 I can afford it'. No you can't! If you have debt on store cards that charge you high interest rates then they have to go. Only treat yourself to that shirt at the end of the month once you've saved $20.
Store cards can typically charge around 30% APR. That means every year that you have $100 on that card you will pay $30 just in interest on that amount. Now how many people have store cards with $1000 on them? Just imagine now $300 of your hard earned cash going straight down the pan! If you have $3000 on store cards, that's almost $1000 before you've started! Credit cards can charge similar amounts but if you shop around you can get much better deals. See below for Credit Card tips.
These are probably the most expensive cards that you have, so get rid of these first. That should be your first main goal. Look at which ones you have and how much you owe on each, then target the first one with a timeframe of paying that off. Push yourself you'll reap the benefits much quicker and be out of debt fast. Only then will you see how far your income actually goes each month. You will be amazed!
2. Switch credit card provider
If you absolutely must have a credit card make sure it has benefits such as a 0% introductory offer for purchases or 0% balance transfers. This is 'free' money providing you learn how to control your spending habits. Some credit card providers give this for up to 12 months. That should be enough time for you to get your house in order shouldn't it?
However, it is possible that your credit rating is shot and you can't get a new credit card. This isn't such a bad thing trust me. If you're in this debt ridden situation in the first place that last thing you need is people throwing offers at you that you can't pay off when the introductory offer ends!
\
You can even try using only cash each day. I understand credit cards are convenient and sometimes the only way to pay. See if you can get used to budgeting with what you have each day in your purse to use, instead of throwing that plastic around like there's no tomorrow!
3. Stop the overdraft
Again, another expensive way of saying 'use me when you're really tight on cash'. The overdraft facility is there for emergencies only, not a target each month of what you've got to spend! Typically around 19% APR is just way too expensive in the current economic climate, particularly when the interest that you earn on savings (SAVINGS! What savings, I'm in debt!) are only 2-5%. Talk to the bank manager and ask for a reasonable amount on your account as a buffer zone. This overdraft must only to be used when things get tough.
Best option is not to have one at all. If you can discipline your spending so that you don't spend all of your income each month then you're already saving money by not using the overdraft.
4. Pay off the loan(s)
If you have more than one personal loan then again as with the store cards, target the highest interest rate loan first. Calculate how quickly you can feasibly pay that one off without having to eat bread and water each month. If you have two or three different loan providers see which one has the lowest interest rate and enquire about switching the other debts to that provider. You may find another bank or provider with much better interest rates for the aggregated loans sum.
If the amount you pay each month is $200 for one loan, try and stretch yourself to increasing the payments to $250. This will get the debt out of the way much quicker. Or decrease the term remaining to finish the loan. This will automatically increase the monthly amount payable. As long as it's manageable then push the amount up as far as you can to repay each month. The temptation is to think if I get an extra $2000 we can have that holiday we talked about! NO! The exercise here is to start getting rid of the debt so that you can holiday more frequently with your own CASH!
5. Switch utility providers
How many companies are there now that you can turn to? In the UK I can think of 8 different providers that offer joint gas and electric supplies. You're not usually tied in either often so you can switch whenever it suits your circumstances. Some may tie you in for one year but that's not a long time.
They all have different offers depending on the size of family living in the home. It's all here online so make the most of the search engines and even the comparison sites to help your decision making. This is time well spent to save hundreds from your bills. Look in detail at the offers and when do you actually use the main part of your gas and electricity. If it's peak time as you're a stay at home Mom then look for the best deal for daytime tariffs.
6. Try a different bank for your mortgage
If you've never missed payments on your mortgage then you should be able to find a more competitive rate than what you've currently got. When we initially purchase our home we're offered all kinds of discounted or tracker rate mortgages. Once that discount period has finished we're generally paying through the nose. Providing there's no tie-in period, look to switch again straight away. You may have to pay a setup fee but do the math and if over the discount period you're going to save $2000 and the setup cost is only $500 then it's worth taking the offer. You have to think on your feet here when the bank salesman is pressing you to how good this deal is! Walk away and compare 2 or 3 banks. They still need solid customers to give them business in this economic slump.
What if your credit rating is not good enough at the current time? Well you just don't have a choice and must stay where you are for now. If someone out there is going to provide you with a loan when you have a bad credit score then it ain't going to be a cheap deal! They have to factor in defaulting from your payments into their costs of doing business with you.
7. Reduce unnecessary expenses
How much is your cell phone bill each month? Can you reduce the plan from $100 to $50? So many special offers out there to tempt you; latest handset, more talk-time, 1000s of free SMS messages, free internet. Just make sure the contract length doesn't tie you in for more than 12-18 months. That way you can still get that latest gadget phone, instead of being left with the old brick.
Cable or satellite. Do you have a free plan or are you paying for the most expensive deal with all 400 channels? How many channels can you watch at the same time! Jeepers, get away from that one-eyed monster. Satellite or cable boxes used from e-bay go for peanuts. Then don't sign up for a plan just take the free channels that are being offered. You can always get stuff you really want to watch from the internet (for legal reasons I'm not advocating doing this!!
Switch things off! When you're not in the house make sure everything is turned off. How many small red lamps are shining on all the equipment that's on standby in your home? Turn lights off behind you. Just watch your meter slow right down. Do you ever leave the TV on when you're not watching it? Boil the kettle and forget to make the drink? Turn the oven on for 30 minutes to heat up before starting to cook? These are all small things that can make a huge difference.
Gym memberships can be expensive. Can you reduce this plan or find another gym? If you go there specifically to socialise then take your friends with you to a different gym or ask for a group discount for all of you at your current one. Stop going altogether until you're out of debt. Get some free weights at home if you don't have some in the garage already collecting dust! Cycle or run around the block near your home instead with your friends.
If you're going to visit friends that live nearby don't take the car. Get walking, cycling, run or public transport. Save the planet, get fit and save cash all in one! Even cheaper get them to come to you (a little cheeky doing this every time though, and they may catch on you never go to their house!)
8. Organise your outgoings
Only use cash. Work out how much cash you have left once all essential outgoings have been paid. Break this amount down to weekly and then daily. When you see your purse is empty you know you can't spend anymore that day! It's a real eye-opener to find out how little $20 buys these days and how quickly it goes.
Pay all bills around the day of the month that you get paid. I'm not sure how many people out there still get brown envelopes stuffed with cash these days? Or a weekly pay cheque? If you're paid monthly by your employer on 1st of the month then make sure you have standing orders from your account on 2nd or 3rd of each month. This way, once all the bills have gone out, you know exactly what you have to play with for the rest of the month. Let me tell you this may not be pretty either! Don't worry, at some point in the near future most of the expenditure from loans and cards will disappear. You'll then just be left with the essential bills.
Once you understand exactly how much spare cash you have once everything has been paid you can make sure you put aside at least 10% of that sum. If your outgoings exceed your incomings then there is a problem. The ways to fix that are get a higher paid job (easier said than done buddy!) get a part-time job in addition to your full-time one (man how many hours do you think I have in a day? When do I take care of my family?!). The sooner you get yourself back on the straight and narrow with your finances you can kick that second job into touch and spend more quality time with the ones you love. Let's say your income is $2000 per month. Your outgoings are $1300. This $700 isn't what you have now to blow on what you want! Take off $150 for emergencies or the savings pot. Now live off the $550. Budget well each and every day. $550 for the month equates to around $18 per day. That will go like water if you're not careful.
9. Get streetwise
Don't pay the ticket price, ever! If the sticker says full price walk away. When it's time to treat yourself to that skirt in the sale (I'm talking mainly to the females here but hey, whatever floats your boat!) make sure you have that $30 that you put aside over the last couple of months. It feels so much nicer to pay cash that you've saved and then get the extra discount too. Make your money do the work friend. Each and every cent you earn can go that little bit further. Delayed gratification is what you need to practice. This means save first and purchase when you can, and always at a sale price.
BOGOF (I assume this term is used outside of the UK?) Buy-One-Get-One-Free offers. There are always deals at your supermarket. Heck if you can't eat the stuff this week, freeze it until you're ready to eat it. Savings on your food bill can be made in many ways; loyalty programs with certain chains of supermarket are another nice bonus. Reduce the unnecessary purchases. Get those sweets out of the trolley! Instead of all the brand name items try the supermarket equivalent. If it's no good then go back to the branded stuff next month.
Do you really need the latest gadgets or toys? For me, I always wait until the model has been on the market a while and when the latest model is about to be released, I get the older one for a big discount. Buy second hand. Providing what you're looking for isn't too high a ticket value then why does it have to be brand new? Remember you're in debt here so these trappings are not actually necessary anyway.
10. Look at other ways to make money
Garage sales, distribute leaflets, rent a room in your home, and borrow books and DVDs from the library. There are 101 ways that I'm sure you can think of in a very short space of time if you apply your mind. Sit down and think about this with your partner or a friend. Bounce ideas around, there is nothing too silly to put down on paper. A friend of mine got his son making his own cash by selling a niche product to his school friends! It was a really cool idea that Dad didn't think would work but it's amazing what you can do if you put yourself into it whole heartedly.
There are businesses out there that you can start up for a very small amount of money. I have set my online business up for less than $100. The internet is full of opportunities for 'normal' folks to do something magnificent. Don't believe the hype (great track, if some of you know that one?) of these guys who start from scratch and make 6-figure incomes in two months. I'm sure that does happen in exceptional circumstances but it's few and far between. Check out my sites and see exactly what I'm doing. See if that is something that would interest you. Fire me an email if you have any questions and I'll do my best to answer in a short space of time.
Keep at it, you will reap the benefits in a really short space of time. Don't stress yourself too much by over-budgeting and not being able to enjoy life. Just limit what you're doing that wastes money. Give yourself a pat on the back by spending a small amount at the end of the month if you've made great progress. Discipline is the key. I have been through all of the things in this report and got myself out of debt so I understand what you're going through. It does take some time but it's worth it trust me!
I hope you find this report useful, enjoyed some of the funny stuff and it gives you hope that you can be debt free and start living the way you want to.
1. Cut up those cards!
If you don't have the discipline to refrain from using any store or credit cards then they have to be cut up. It's too tempting to say 'I need that shirt; it's only $20 I can afford it'. No you can't! If you have debt on store cards that charge you high interest rates then they have to go. Only treat yourself to that shirt at the end of the month once you've saved $20.
Store cards can typically charge around 30% APR. That means every year that you have $100 on that card you will pay $30 just in interest on that amount. Now how many people have store cards with $1000 on them? Just imagine now $300 of your hard earned cash going straight down the pan! If you have $3000 on store cards, that's almost $1000 before you've started! Credit cards can charge similar amounts but if you shop around you can get much better deals. See below for Credit Card tips.
These are probably the most expensive cards that you have, so get rid of these first. That should be your first main goal. Look at which ones you have and how much you owe on each, then target the first one with a timeframe of paying that off. Push yourself you'll reap the benefits much quicker and be out of debt fast. Only then will you see how far your income actually goes each month. You will be amazed!
2. Switch credit card provider
If you absolutely must have a credit card make sure it has benefits such as a 0% introductory offer for purchases or 0% balance transfers. This is 'free' money providing you learn how to control your spending habits. Some credit card providers give this for up to 12 months. That should be enough time for you to get your house in order shouldn't it?
However, it is possible that your credit rating is shot and you can't get a new credit card. This isn't such a bad thing trust me. If you're in this debt ridden situation in the first place that last thing you need is people throwing offers at you that you can't pay off when the introductory offer ends!
\
You can even try using only cash each day. I understand credit cards are convenient and sometimes the only way to pay. See if you can get used to budgeting with what you have each day in your purse to use, instead of throwing that plastic around like there's no tomorrow!
3. Stop the overdraft
Again, another expensive way of saying 'use me when you're really tight on cash'. The overdraft facility is there for emergencies only, not a target each month of what you've got to spend! Typically around 19% APR is just way too expensive in the current economic climate, particularly when the interest that you earn on savings (SAVINGS! What savings, I'm in debt!) are only 2-5%. Talk to the bank manager and ask for a reasonable amount on your account as a buffer zone. This overdraft must only to be used when things get tough.
Best option is not to have one at all. If you can discipline your spending so that you don't spend all of your income each month then you're already saving money by not using the overdraft.
4. Pay off the loan(s)
If you have more than one personal loan then again as with the store cards, target the highest interest rate loan first. Calculate how quickly you can feasibly pay that one off without having to eat bread and water each month. If you have two or three different loan providers see which one has the lowest interest rate and enquire about switching the other debts to that provider. You may find another bank or provider with much better interest rates for the aggregated loans sum.
If the amount you pay each month is $200 for one loan, try and stretch yourself to increasing the payments to $250. This will get the debt out of the way much quicker. Or decrease the term remaining to finish the loan. This will automatically increase the monthly amount payable. As long as it's manageable then push the amount up as far as you can to repay each month. The temptation is to think if I get an extra $2000 we can have that holiday we talked about! NO! The exercise here is to start getting rid of the debt so that you can holiday more frequently with your own CASH!
5. Switch utility providers
How many companies are there now that you can turn to? In the UK I can think of 8 different providers that offer joint gas and electric supplies. You're not usually tied in either often so you can switch whenever it suits your circumstances. Some may tie you in for one year but that's not a long time.
They all have different offers depending on the size of family living in the home. It's all here online so make the most of the search engines and even the comparison sites to help your decision making. This is time well spent to save hundreds from your bills. Look in detail at the offers and when do you actually use the main part of your gas and electricity. If it's peak time as you're a stay at home Mom then look for the best deal for daytime tariffs.
6. Try a different bank for your mortgage
If you've never missed payments on your mortgage then you should be able to find a more competitive rate than what you've currently got. When we initially purchase our home we're offered all kinds of discounted or tracker rate mortgages. Once that discount period has finished we're generally paying through the nose. Providing there's no tie-in period, look to switch again straight away. You may have to pay a setup fee but do the math and if over the discount period you're going to save $2000 and the setup cost is only $500 then it's worth taking the offer. You have to think on your feet here when the bank salesman is pressing you to how good this deal is! Walk away and compare 2 or 3 banks. They still need solid customers to give them business in this economic slump.
What if your credit rating is not good enough at the current time? Well you just don't have a choice and must stay where you are for now. If someone out there is going to provide you with a loan when you have a bad credit score then it ain't going to be a cheap deal! They have to factor in defaulting from your payments into their costs of doing business with you.
7. Reduce unnecessary expenses
How much is your cell phone bill each month? Can you reduce the plan from $100 to $50? So many special offers out there to tempt you; latest handset, more talk-time, 1000s of free SMS messages, free internet. Just make sure the contract length doesn't tie you in for more than 12-18 months. That way you can still get that latest gadget phone, instead of being left with the old brick.
Cable or satellite. Do you have a free plan or are you paying for the most expensive deal with all 400 channels? How many channels can you watch at the same time! Jeepers, get away from that one-eyed monster. Satellite or cable boxes used from e-bay go for peanuts. Then don't sign up for a plan just take the free channels that are being offered. You can always get stuff you really want to watch from the internet (for legal reasons I'm not advocating doing this!!
Switch things off! When you're not in the house make sure everything is turned off. How many small red lamps are shining on all the equipment that's on standby in your home? Turn lights off behind you. Just watch your meter slow right down. Do you ever leave the TV on when you're not watching it? Boil the kettle and forget to make the drink? Turn the oven on for 30 minutes to heat up before starting to cook? These are all small things that can make a huge difference.
Gym memberships can be expensive. Can you reduce this plan or find another gym? If you go there specifically to socialise then take your friends with you to a different gym or ask for a group discount for all of you at your current one. Stop going altogether until you're out of debt. Get some free weights at home if you don't have some in the garage already collecting dust! Cycle or run around the block near your home instead with your friends.
If you're going to visit friends that live nearby don't take the car. Get walking, cycling, run or public transport. Save the planet, get fit and save cash all in one! Even cheaper get them to come to you (a little cheeky doing this every time though, and they may catch on you never go to their house!)
8. Organise your outgoings
Only use cash. Work out how much cash you have left once all essential outgoings have been paid. Break this amount down to weekly and then daily. When you see your purse is empty you know you can't spend anymore that day! It's a real eye-opener to find out how little $20 buys these days and how quickly it goes.
Pay all bills around the day of the month that you get paid. I'm not sure how many people out there still get brown envelopes stuffed with cash these days? Or a weekly pay cheque? If you're paid monthly by your employer on 1st of the month then make sure you have standing orders from your account on 2nd or 3rd of each month. This way, once all the bills have gone out, you know exactly what you have to play with for the rest of the month. Let me tell you this may not be pretty either! Don't worry, at some point in the near future most of the expenditure from loans and cards will disappear. You'll then just be left with the essential bills.
Once you understand exactly how much spare cash you have once everything has been paid you can make sure you put aside at least 10% of that sum. If your outgoings exceed your incomings then there is a problem. The ways to fix that are get a higher paid job (easier said than done buddy!) get a part-time job in addition to your full-time one (man how many hours do you think I have in a day? When do I take care of my family?!). The sooner you get yourself back on the straight and narrow with your finances you can kick that second job into touch and spend more quality time with the ones you love. Let's say your income is $2000 per month. Your outgoings are $1300. This $700 isn't what you have now to blow on what you want! Take off $150 for emergencies or the savings pot. Now live off the $550. Budget well each and every day. $550 for the month equates to around $18 per day. That will go like water if you're not careful.
9. Get streetwise
Don't pay the ticket price, ever! If the sticker says full price walk away. When it's time to treat yourself to that skirt in the sale (I'm talking mainly to the females here but hey, whatever floats your boat!) make sure you have that $30 that you put aside over the last couple of months. It feels so much nicer to pay cash that you've saved and then get the extra discount too. Make your money do the work friend. Each and every cent you earn can go that little bit further. Delayed gratification is what you need to practice. This means save first and purchase when you can, and always at a sale price.
BOGOF (I assume this term is used outside of the UK?) Buy-One-Get-One-Free offers. There are always deals at your supermarket. Heck if you can't eat the stuff this week, freeze it until you're ready to eat it. Savings on your food bill can be made in many ways; loyalty programs with certain chains of supermarket are another nice bonus. Reduce the unnecessary purchases. Get those sweets out of the trolley! Instead of all the brand name items try the supermarket equivalent. If it's no good then go back to the branded stuff next month.
Do you really need the latest gadgets or toys? For me, I always wait until the model has been on the market a while and when the latest model is about to be released, I get the older one for a big discount. Buy second hand. Providing what you're looking for isn't too high a ticket value then why does it have to be brand new? Remember you're in debt here so these trappings are not actually necessary anyway.
10. Look at other ways to make money
Garage sales, distribute leaflets, rent a room in your home, and borrow books and DVDs from the library. There are 101 ways that I'm sure you can think of in a very short space of time if you apply your mind. Sit down and think about this with your partner or a friend. Bounce ideas around, there is nothing too silly to put down on paper. A friend of mine got his son making his own cash by selling a niche product to his school friends! It was a really cool idea that Dad didn't think would work but it's amazing what you can do if you put yourself into it whole heartedly.
There are businesses out there that you can start up for a very small amount of money. I have set my online business up for less than $100. The internet is full of opportunities for 'normal' folks to do something magnificent. Don't believe the hype (great track, if some of you know that one?) of these guys who start from scratch and make 6-figure incomes in two months. I'm sure that does happen in exceptional circumstances but it's few and far between. Check out my sites and see exactly what I'm doing. See if that is something that would interest you. Fire me an email if you have any questions and I'll do my best to answer in a short space of time.
Keep at it, you will reap the benefits in a really short space of time. Don't stress yourself too much by over-budgeting and not being able to enjoy life. Just limit what you're doing that wastes money. Give yourself a pat on the back by spending a small amount at the end of the month if you've made great progress. Discipline is the key. I have been through all of the things in this report and got myself out of debt so I understand what you're going through. It does take some time but it's worth it trust me!
I hope you find this report useful, enjoyed some of the funny stuff and it gives you hope that you can be debt free and start living the way you want to.
Loads of free tips and tutorials for Internet Marketing and check out my rags to riches journey on my blog http://martinsonlinemoneymaking.blogspot.com/ Thanks for reading this article, Martin
No comments:
Post a Comment