By Sherrie Le Masurier The trouble with debt, is that it isn't indexed to your paycheque. It's hard not to get caught up in a web of credit card balances and bank loans in today's 'buy now-pay-later' society.
But if
you're ever going to succeed in making your money go further, the debts have to
be eliminated or at the very least, minimized. Crystal
and I offer the following tried and true suggestions for getting out of debt: Keep
a Budget The
first step is to keep a budget and stick to it. If you don’t know where your
money is going, you'll never effectively control your spending. Keep a
record of your expenses front and centre. Say on your fridge door or on your
home office bulletin board. List everything from the amount you paid the
paperboy to the money you spent on ice cream cones for the kids. You'll soon
have an appreciation of where your money is going and how quickly. Give some
thought to unnecessary purchases Credit
Cards Consider
having just one credit card. Pay
off your balances each month rather than the minimum payment. Use your
cards only for emergencies or planned purchases. If you can't avoid carrying a
balance, double or triple the minimum payment. Remember the word 'minimum'- you
can pay as much as you want. Never skip a payment. It affects your credit
history. Interest
Rates Know your interest rates, and re-structure your debt by paying down the
highest interest-bearing loans first, or consider consolidating all of them into
one loan at a lower rate of interest through your bank. Remember that credit
card rates are not created equal - you could be paying a higher rate on your
department store or finance company account, than on your Visa or MasterCard.
Shop
Around Comparison
shop for everything - credit cards, mortgages, auto insurance. Retailers and
service providers are extremely competitive today. Make sure you're comparing
apples with apples, but make sure you compare. You can save big dollars by doing
some research first. Make it a hobby. Buy
Used Consider
buying ‘gently’ used instead of ‘brand’
new. It makes good economic sense, its popular and recycling helps the
environment. Used clothing stores are everywhere, retailers are opening 'nearly
new' departments; and automotive dealers are beefing up their used car lots and
advertising wholesale divisions. Go ahead and buy new if you have the financial
freedom. But if you want to reduce debt, give second hand items a try. Restructure
Finances Analyze
your bank charges, and make sure they make sense for your needs. If you're
always running to the bank machine or writing cheques, you might be paying
unnecessary service charges. Restructure
your finances so that you're running to the bank less often, or switch to an
account better suited to your needs. It could cost you less. Use
Your Vehicle Less Ride a bicycle to work in the warmer weather months instead of using your car. It's good exercise and you can save big dollars on gas, maintenance and insurance by only having your vehicle on the road six months of the year.
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