When your spending gets out of control, it’s easy to beat yourself up and to feel guilty. It’s easy to wallow and convince yourself that you’re never going to get a handle on things. Let this article be the first to tell you that is not true. After all, you got yourself into this situation, right? You can and will get yourself out.
The first thing you need to do when you’re drowning in debt and dealing with some out of control spending habits is stop spending. Freeze your credit cards (literally) so that you can’t pull them out of your wallet on a moment’s notice. Erase your card data from all of your favorite shopping sites. You’ll be amazed at how many things you suddenly don’t need when buying them means having to do a bunch of extra steps to complete the paying process.
Next, you’ll need to figure out exactly what you owe and to whom you owe it. Get a copy of your credit report, gather together all of your bills, and make a list. Then turn that list into a budget.
Now you need to figure out how to stick to that budget every month. If you’ve never really tried to follow a budget before, this might be really difficult. You might want to start out by using the envelope method until you’re less likely to shift money from one budget column to another to make room for impulse purchases.
This is the hardest part of getting your finances together: not the living below your means so that you can pay down your debt and get your spending back on track. No, we’re talking about living well enough below your means that you won’t be tempted to give in to impulses and start spending again. Here are some things that you can do that will help you with that.
Learn to Hunt for Bargains
Anybody can clip coupons out of the Sunday paper (which is where all of the best grocery and department store deals live, fyi). What we’re talking about here is reducing your utility and entertainment expenses.
In some cities, depending on your income, you might qualify for reductions in electricity, gas and even internet costs. In Seattle, for example, residents are able to qualify for $10/month internet through the city’s website. In Texas, Direct TV offers discounts to residents to help lower their television bills by quite a bit as well.
Spend some time calling around to the different providers in your area. Do some research on your city and state sites. You’ll be amazed at the savings you can find.
Learn to Love Your Library
Yes, everybody knows that the library is a great place to find books, and even DVDs and CDs. What you might not know is that the library is a great place for family events. A lot of libraries have movie nights, concerts, guest speakers, host traveling exhibits, etc. Most of the events they put on don’t require any money to attend and are great for filling afternoons and evenings that might have otherwise been spent trying to prevent boredom by shopping.
Ask for Help
This doesn’t mean applying for SNAP benefits or other governmental assistance (though if you need this type of help, you should absolutely apply for it!). What we mean here is by simply asking for help if it will help you save money. For example:
- Ask a friend or family member to share streaming media accounts to reduce their cost.
- Ask the butcher to cut up larger (and cheaper) cuts of meat instead of paying extra for cuts that have already been separated and packaged individually.
- When buying produce, ask for discounts on produce that is a little bruised–you can always cut out the blemishes off! This is a particularly effective technique at farmers markets.
- Ask a friend to open a joint account at Costco or Sam’s Club. Then shop together and split your purchases into more manageable sizes.
- Ask your health insurance provider if you get a discount for either bundling up or separating out your family’s insurance plans.
- Ask to bundle renter’s/homeowner’s insurance with car insurance.
- Ask if stores you shop at often have loyalty or rewards programs.
There are a lot of ways to cut costs and reduce spending. Most of them are common sense: buying things in bulk, using coupons, etc. But some take a little more digging. Do you have a favorite way to reduce your cost of living and better live below your means? Let us know!
Track All Your Accounts With Personal CapitalPersonal Capital lets you see all of your accounts in one convenient place. Sign up now for free.
What do you think?