Reduce your Debt in 2016
A big New Year’s Resolution many people will make for 2016 is to reduce their debt. Many people make the same resolution year after year, but something always seems to go awry, and it doesn’t happen. So the next year they renew the same resolution and continue this vicious cycle. But it doesn’t have to be. If you have been making that same resolution year after year and never getting anywhere, it’s time to stop the cycle and this year use the right methods to actually reduce your debt.
One of the problems so many people make is that they realize in order to reduce debt, you must reduce spending. This is very true, but that doesn’t mean you cut every little luxury from your life so before the end of January, you feel so deprived, you decide it just isn’t worth it.
The only way to reduce your debt is to reduce your spending, but it doesn’t mean you have to cut out everything. Just like when dieting, when you forbid yourself every treat, you set yourself up for failure because it doesn’t take long to feel like you are depriving yourself of everything you want and then you end up binging. So let’s look at how to reduce your debt without it being so painful.
First, look at all your income and expenses, I mean really look at them. Some things we can’t change, like our mortgage or rent payment, insurance or car payments. But we have at least a little bit of control over nearly every other expense, from utilities to gas and groceries, some you may only be able to control a little (like gas), but others, you would be surprised at how much you can control those expenses.
Most utility companies offer a free service where they will come to your house, inspect it and offer you tips on how to save energy. This can be especially helpful with the electric bill. Remind everyone in the family to turn off lights when they are not in the room. Whether your washer and dryer is gas or electric, make sure you have a full load each time you wash, instead of just doing a couple of things. The machine uses approximately the same amount of energy for all loads, so make the most of it and do full loads.
Now, let’s talk about those grocery bills. First, if you don’t really know how to cook, learn. It really is cheaper than convenience foods. Also, if you have a family, cooking together is a great time to spend with each other, as well as teaching your children a useful skill for when they grow up. There is no need to be a super couponer, but definitely go through the weekly circular and the coupons in your Sunday paper to see what is on sale or there is a coupon for a product you use. Just because something is a good deal doesn’t mean you need to buy it. It’s only a good deal if it is something you use, and it is something that will last if you stock up. Personally, I like to stock up on butter when it is on sale and keep it in the freezer. This way, I always have enough when I need to bake something or make a special dish (ok, yes, I love butter). I have a friend who stocks up on coffee when it is on sale, because his family goes through a lot of coffee, and when the can is unopened, it stays fresh for quite a while. The point is, go for the sales only on things you use. For instance, I don’t eat a lot of cereal, so no matter how great the sale is, for me, it is a waste to buy it.
Also, try some generic store brands. They are usually a great deal less expensive, and they are actually made by the major brands and relabeled for the stores, so it’s the same product with a different label. Don’t go hog wild and come home with all generic items. Try one or two that seem like they might be ok. Sometimes you might find you like the store brand better. Other times, the generic brand turns out to be something you don’t like, but if you never try it, you won’t ever know.
These are little things where you save money that you can apply to reducing your debt. If you stop and buy gourmet coffee every day, start making coffee at home and allow yourself your favorite gourmet coffee only once a week. Now you look forward to that treat and meanwhile within a year, believe it or not, those other 4 days where you aren’t paying for gourmet coffee can save you nearly a thousand dollars!
Searching for great deals on personal finances, stay tuned to Signature Loan Network for insight into credit cards, loans and more money savings tips in 2016!