Now that you have a hold of your emotions, a realistic view of your finances, and have brainstormed some ways to increase your household income, we have to talk about what might be the hardest part for most of us.
The word makes us all cringe whether it is said in a household or in a corporate setting. No one wants to hear that spending on something has to stop or be greatly reduced. But if it hasn't worked out well up to this point, it will not miraculously start working well now. It's time to cut ties with some superfluous spending and decide what you can really live with(out).
Here are some common themes:
- Do NOT touch your credit card again. Not until you have convinced yourself that you truly do not need it for purchases. You might need to hide it from yourself to make this happen. You might have to put it in a block of ice. You might need to shred it. Whatever you need to do, make sure you STOP using it. You cannot pay off debt as long as you are adding to it.
- Stop eating out. Yep. Cook at home.
- No more movie theater. Seriously...that place is expensive. Hop to RedBox for $1 (or free with a code) and pop your own popcorn. Plus you can hit "pause" when someone has to potty. =)
- Install energy saving devices like timers on thermostats, CFL light bulbs, low flow shower heads, in line hot water heater, etc.
- No more concerts/theater/sporting events/etc. Pretty much cut out premium entertainment. I know...sounds hard to some of you, but you will be able to go again...just after you have a firm grasp on your finances.
- Trim you internet/cable/satellite/phone package. Shop around. You are likely to find a better deal than you are paying. Be willing to threaten to leave your current company for another with lower rates and be willing to follow through with that threat.
- Shop with coupons. Shop sales. There are THOUSANDS of blogs and website to help you with this (this used to be one of them)...start searching. If you want referrals, email me and I will send you some! There is no reason to ever pay for toothpaste again (you can always get it for free via sales and coupons if you know how/where to look).
- Stop shopping at the mall. Seriously...you don't need all of that stuff. Shop in your own closet. Swap clothes with a friend. Visit a consignment or thrift store.
- Learn how to be a homebody. Your home is not that bad of a place. If it is, do something to make that untrue so you can enjoy time at home with your family. This cuts out the cost of entertainment and the cost of a sitter for the kids.
- Learn to say "no." To people, to new activities, to children. It's not a forever solution, but you need to say "no" a lot when getting out of debt.
- Drop your data plan from your mobile service. Seriously...you likely have a computer at home and at work. You don't need one with you at Walmart. Useless for anything other than entertainment.
- Drop the gym membership. You can work out at home and run around the neighborhood.
- Carpool. Or public transportation. Or bicycle. Whatever you can do where you live to cut down on the cost of getting to/from places will help your budget.
- Eat leftovers or make over your food for another meal. Manage your current food supply better. No throwing food away.
- Kill any subscriptions that offer no value (memberships, magazines, newspaper, book clubs, etc). You can always just buy the Sunday paper for the coupons. =)
- Step away from shopping sites. The more you see them, the more tempted you will be.
- Adjust your thermostat to be more extreme. Use more blankets now. Use more fans in the warmer months.
- Cancel the lawn service.
- Shop around for insurance. Make sure you are getting the best rate.
I know some of these (or all) may feel uncomfortable at first. If you want to make a big impact and you are excited, go for as many of these (and others!) that you can pull off. If you are a big more dependent on these things, pick a few and go for it. In one month pick 2-3 more.
Regardless of how quickly you make big changes know that three things will happen:
- You will get bored of it. Seriously...it's not nearly as much fun getting out of debt as it was getting into it. But stick it out and you will experience freedom like you've never known when you are finished.
- You will then learn that you do not need everything you once thought you did. Seriously...now that I'm content in our saving ways, I can't imagine paying full price for groceries and toiletries even once we have money to spend. Amazing.
- Once you see the debt numbers decreasing, you will start looking for MORE ways to cut costs to knock it out quicker. I promise, it will become a fun challenge to be victorious over this stranglehold.
Photo credit: linusb4