Well, it happened again. Despite your best efforts and discipline, you went over budget on the holidays. Many other people have done the same, and you probably deserved to spend more than you intended. The past few years have been challenging.
Except now you’ve got more credit card debt than you’re used to carrying, and there’s no denying those interest payments can be painful.
Not to worry. Here’s some quick and easy adjustments to your spending that will help get down your debt as quickly as possible.
A) Create a Monthly Budget
It’s surprising how many people have never done this simple and enlightening task.
If you’ve never done this before, creating a budget for your household can be an easy, useful — and sometimes eye-opening — tool in managing your spending. Simply track how much your household spends vs. how much it earns. Then look for areas where you can trim.
Consider fixed costs — mortgage/rent, car payments, insurance, utilities — then look hard at discretionary spending like entertainment and personal shopping. Do you really need five streaming services when you can only watch one at a time? Reconsider you grocery bill. Avocados are very expensive these days. How about buying them every other week?
Budget Tips: Be sure to record ever penny you spend. As the saying goes, it’s the little things. Use a notebook or record it on you phone if necessary. Track your mortgage payments but also keep a daily record of every take-out coffee and check-out line of lip balm you purchase. The devil is in the details. Here’s where you can see how easy it is to cut your spending. Fifty to a hundred dollars spent less a week on impulse purchases is that same amount of debt and interest removed from you life.
B) Stick to your Budget
The necessary caveat to creating a budget is sticking to it. Sacrifices will be required. Tough questions should be asked. How much are you in debt? Perhaps you could move your fitness regime to a less expensive gym. And do you need two cars, or can you manage with one? Be honest.
C) Adjust your Banking Habits
A possible silver lining in your holiday over-spending is that you’ve probably racked up points that you can now redeem to cover necessary daily expenses like groceries and gas. And if you’re not on a points plan, now’s the time to get on one and earn rewards on everyday spending.
Since you’re budgeting and tracking expenses, you should also spend more time checking your accounts. Be prepared to make cost-cutting adjustments to them. A credit card that earns you big travels points isn’t worth the hundreds of dollars in fees when you can’t afford to take that big trip.
D) Spend more Strategically
Yes, you’re cutting back spending but some large purchases are inevitable. If so, try waiting 30 days before a big-ticket purchase like a new couch or a television to make sure you actually need it. If you do, be sure to use a card that will maximize the points you receive.
E) Consider driving less
Gasoline prices remain high, and can be a major drain on your household’s finances. Ask yourself: can you walk, cycle, or take transit to some of your destinations? To save on gas and perhaps exorbitant parking fees. You’ll be doing yourself, and the planet, a favour.
F) More Spending Hacks
Cook at home more often, and bring your lunch to work. You’ll enjoying ordering in more when you do.
Make a list of necessities when you’re grocery shopping, and stick to it.
If you’re ordering online, consider picking an item up at a store or a distribution centre to avoid delivery charges.
If necessary, use less water and electricity at home. Unplug unused electrical items like televisions and modems overnight, and take shorter showers
G) The Pay Off!
Congratulations. You’ve stuck to your budget, and cut down your debt. Now use your new financial savvy and spending smarts to continue saving for that dream vacation or big-ticket item.
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Photo by lucas Favre on Unsplash