Sure, you can stop buying non-essential items and cut out the little treats – and this will save you some money… but it probably won’t have a big enough impact to considerably improve your situation.

So what can you do?

In this guide, we’re going to run through 10 great tips to help you cut your costs, leaving you with that little bit of extra money each month (which, if you’re feeling particularly frugal, you could save).

1. Budget
First and foremost, if you’re planning to save some money, you will need to get your budget in order.

Your budget is a monthly (or even weekly) plan of your finances that can help you maintain control over your money. To create your own budget, you’ll need to do the following things:

• Write down all the money you earn / receive on a monthly basis, followed by the money you spend on essential costs (such as utility bills, food and secured debt payments).
• Once you have these amounts, subtract your expenditure on essentials from the money you earn – and you will be left with a figure.
• This figure is known as your ‘disposable income’, and it is the money you have available each month to spend on your unsecured debt repayments along with non-essentials.

Please note, though, that some of your disposable income can also be used for savings.

If your disposable income is actually a negative number, you should seek professional debt advice as soon as you can, as it means you can’t afford all your financial commitments.

2. Discount Vouchers
More and more retailers, including supermarkets, are providing discount vouchers to their customers. Discount vouchers can be printed off the internet and found in newspapers – but regardless of where you find them, they can save you money.

The key thing here is to only use your discount vouchers on items you were planning to buy in the first place. There is no point buying something you don’t need just because you can get it cheaper than usual – as you won’t save any money by doing this.

3. Shop Online
If you’re planning to buy something, why not search for it on the internet before hitting the shops, to see if you can find it cheaper?

Competition for retailers is tough online, so many have to lower their prices so you’ll choose them over other traders. In most cases, you can buy items cheaper online than you can on the high street – even if you’re only saving a small percentage of the item’s value, it all adds up!

4. Share a Lift
If you know someone who heads the same way you do on the way to work, why not share a lift? You could drive one week, and your colleague could drive the next… you’ll save a fortune in travel costs!

5. Save The Pennies
If you ever come home from the shops with a pocket full of change… don’t just leave this lying around, because it will gradually get spent (probably on non-essentials). Instead, put this spare change into a pot, and don’t open this pot all year.

Then, when the end of the year comes, count the money inside and use it to pay some bills, for example, or to cover your food costs for a while!

6. Switch Lights Off
Cutting back on your non-essential costs is pretty easy and you will see a difference immediately. However, as well as doing this, you could try to reduce your essential costs, too.

This is easier than it sounds, and something as simple as switching the lights off when you’re going out of a room can help considerably. Getting into the habit of doing this will see your electricity usage fall and fall!

7. Alternative Entertainment
If you’re serious about reducing your expenditure, this tip and the next will really help drive your bills down!

Rather than watching TV / hiring DVDs one night, why not find an alternative form of entertainment that takes up less energy / money? Playing board games, reading a book or just talking won’t cost you anything, and can be a great alternative to the TV!

8. Get Active To Keep Warm
Ok, so the past two tips could help you lower your electricity bills… but what about your gas bills?

Well, it’s just as easy – when you get cold, put more layers on and/or do something active! Simply walking around your house, doing a few exercises or cleaning your lounge can warm your body up in minutes… in fact, you might even find yourself getting too hot!

The point here, though, that is if you can warm yourself up, you won’t need to pay for your heating system to do it!

9. Consolidate Your Debts
This tip won’t necessarily save you money, as such, but it can certainly help make your finances easier to manage.

If you’re carrying unsecured debts, such as credit cards and personal loans, instead of making several payments each month, you could consolidate your debts and make just one payment to one creditor.

You can take out a debt consolidation loan, use this to repay all your debts in one go, then repay your loan by making single monthly payments over a longer period of time – which should allow you to reduce your monthly outgoings.

Bear in mind: debt consolidation does have its potential drawbacks and won’t be right for everyone. Repaying debt more slowly can mean you’re paying more in interest in the long run, for instance. To find out more about it you could visit this site: Gregory Pennington.

10. Recycle
Last but not least… one of the best ways to save money at home is to recycle anything you can.

So, once you’ve finished with a jam jar, wash it out and use it to store your spare change in – which will, literally, help you save money! Alternatively, you could use your old jars as storage for bits and bobs – meaning you won’t have to go out and buy storage containers.

Here’s another way you could ‘recycle’ if you’ve got children… when your older children grow out of their clothes, don’t throw them away, but keep them and pass them down to their younger siblings. You could save a fortune by doing this.

Simple things like this, however small, will soon add up and help you cut your costs in no time!

How to Get Out of Debt Part I

Many times, when people are looking for ways to reduce their debt, they go looking to find someone else to help them with their problems. The truth of the matter is that every person is capable of figuring their way out of debt if they have a job and are bringing in some kind of money. Below are some tips to employ to help you gradually, or quickly, work your way out of debt.

1. Write down all your debts. This is always the first step, because, as Dr. Phil might say, you can’t address what you won’t acknowledge. Take one month’s worth of bills and write down what each is, as well as what the amount is that you’re expected to pay. As it pertains to credit cards, also write down the annual percentage rate. Also, write down how much you estimate you spend on things such as food, gas, entertainment, etc.

2. Calculate your monthly net income. Net income means how much you actually bring home, or have deposited into the bank. Hopefully, it’s the same amount every pay period; if not, then it’s going to be a total estimate. There’s a few ways of doing this. One, if it’s the same amount, multiply that by either 52 if you get paid weekly, 26 if you get paid bi-weekly, or 12 if you get paid monthly.

After you’ve done the first two things, see what the difference is between what you’re bringing home and what your monthly bills come to is. Hopefully, you’re on the positive side as far as income goes. If you’re close either way, there’s still hope. If you’re in the ditch, and your expenses outweigh your income, you’re in trouble, but there’s still hope for you.

3. Take a look at the bills you’re paying to see what may be there that you either don’t really need, or can reduce. For instance, if you have cable and have all the premium channels, you could probably get rid of some of those to reduce your bill. Maybe with your cell phone you can eliminate the internet for awhile, or reduce your text message plan somewhat. These are luxuries, not necessities, and you might miss them, but your wallet will thank you. Most people will find that if they really take a good look at things like this, they can save anywhere from $100 to $300 a month, depending on how much they were spoiling themselves.

4. Take a better look at expenses that aren’t monthly bills. You’re probably not going to be able to reduce your gas consumption because you’re not really going to save all that much money taking the bus to work unless you drive long distances, in which case taking the bus might make a lot of sense. However, reducing your entertainment budget might be a big deal, especially if you’re eating out twice a week, or every day for lunch. It’s almost better to increase your food bill a little bit to get things so you can take a lunch with you, and maybe eat out once every two weeks, at a less expensive restaurant, instead of weekly. If you’re really in trouble, extra spending to make yourself feel better will only hurt you.

See more:
How to Get Out of Debt Part II

How to Get Out of Debt Part III

Dr. Phil’s Tips to Eliminate Debt

The 12-step Get Out of Debt Program

However, for at least half the population, looking at debt consolidation might not be for you.  Some people don’t need it.  Some people aren’t ready for it.  Some people are grasping at straws, and hence aren’t taking the time to do the research to find out what might be the best way for them to go.

The fact is that, for those people who need debt consolidation, it can be a boon if you choose the proper way to go.  If you have multiple credit cards with high interest every month and you can not only pay off all those balances at once, but also have a much lower interest rate, which puts more money in your pocket, that can be a good thing.

But it’s not all that simple.  There are responsibilities that come even with doing something like that.  Let’s take a look at reasons why someone might not need, or shouldn’t even think about, debt consolidation:

1.  You make enough money to pay all of your bills.  Many people get nervous when it feels like they can’t pay their bills.  However, all most people really need to learn is how to budget their money.  If you’re someone whose first thought when you get paid is how to spend it, then it’s possible you have the resources to pay your bills, just not the discipline to restrain yourself.  What you need to do first is do a quick list of how much your net pay is times two, estimating your monthly income, then a total of all your bills and their monthly payments.  If you have at least $300 a month more in income than your monthly bills, if you can learn how to budget you might be fine.

2.  You make enough money, but you have no discipline.  So you’ve determined you make enough money, but your interest payments are high and you’d like to consolidate your bills.  The problem is that if you’re a spendthrift, consolidating your bills is only going to get you in more trouble.

When one consolidates their bills, they have to be ready to stop exhibiting some of the bad habits they already have.  One quick way to do that is to stop using all except maybe one of your credit cards.  It does you no good to consolidate your bills, then build more debt on top of that.  If you don’t believe you can maintain discipline, don’t even think about debt consolidation.

3.  Are you good at researching what you’re looking to get into?  If you’re someone who’s sitting at home worried about paying your bills, and the first people you’re ready to call are the ones who are advertising their services on TV, and you’re ready to sign up with them without researching what they’re all about, you’re not ready for debt consolidation.  Just knowing that the recommendation of some of these companies is for you to stop paying your bills should be reason enough to want to learn more about some of these companies.

4.  If you’re making less than the amount your bills come to, debt consolidation isn’t for you.  There’s probably no way that you’ll be able to obtain a loan anyway, unless you put something up for collateral, and it’s possible that the amount that you get to put back into your pocket isn’t enough for you to live on without worrying about defaulting on your loan.  And the last people you want to ever default on are people from whom you’ve gotten a debt consolidation loan from, especially if they’ve tied it into your mortgage.

These are some things to consider before you decide to go forward with debt consolidation.  Every person must be honest with themselves if they don’t want to possibly hurt themselves even more in the future.

The first part, of course, should be in taking a look at what your debt load is to first determine if you have the chance to qualify for a loan.  If you’re making less money than your bills by a significant amount, don’t bother putting in for a debt consolidation loan, because not only will you not qualify, but it could result in a negative statement on your credit report.

The same goes for trying to roll your debt into a home line of credit.  The restrictions for obtaining a line of credit are tougher than getting a loan, and often mortgage companies will recommend a loan rather than giving you a line of credit.  In this case, you might not qualify for either.

If you’re making more money than your monthly debt, even 10% more, you might have a chance to obtain a debt consolidation loan.  That will reduce the amount of your payments, putting more money into your pocket, but you’ll have to make sure that you not only keep up with those payments, as penalties for missing payments can be harsh.

Once you’ve made the decision, based on the figures, that you want to go for a debt consolidation loan, you need to determine where you want to go for that loan.  It’s easy to shop online for the best interest rate, but often your best bet is going to a place where you already have some kind of record, such as the bank or credit union where you already have a checking or savings account, or wherever you make mortgage payments.  They’re usually more willing to work with you in getting something.

Next, you need to know the terms “secured” and “unsecured” or “non-secured” loans.  A secured loan means they’re going to take what your assets are and use them as a lien against your possibly missing payments or defaulting on your loan.  An unsecured loan means they’re not going to take your assets into consideration, but your interest rates and fees will be much higher.

For both of these, you may not get the amount of loan that you’re looking for, and you need to be prepared for this information.  If a loan isn’t going to take care of the worst of your issues, or your interest rates on most of your outstanding debt is lower than what a potential new creditor might offer, getting a loan to consolidate your debt doesn’t make sense.

Then it’s time to go through the grind of the paperwork, and this can not only take awhile, but it can feel invasive.  Most of us aren’t usually going around telling everyone how much our debt is and how much money we make, but you will have to answer these questions are more.

Reputable loan officers aren’t going to take any chances in giving loans to people who they feel might default on them, and they’re going to dig deep into both the numbers and your patterns.  They’re going to make you prove your income by giving them tax statements for at least two years back, sometimes four.  They’re going to ask you about your jewelry, furniture, and other things within your household.  They’re going to ask your permission to take a look at your credit report.  If you go this route, you need to be ready for these types of things.

And, in the end, there’s no guarantee that you’ll even get a loan.  Be prepared for that also, especially in these tough economic times, because you might be left with only three options then: trying to work with your creditors; defaulting in payments and hurting your credit standing; declaring bankruptcy, which isn’t as easy as it used to be, but can help alleviate your present standing while hurting your credit for up to seven years.

It’s important to know not only what your debt consolidation options are, but some of the potential issues that could come up.  The process can be rough, and it might not turn out the way you’re hoping, but it could be the beginning of your financial health starting to recover and receiving financial relief.

Cut Your Debt in Half

In tough times, many more people are looking at debt consolidation as the way to go to help them get out of a financial bind.  Many of them decide to look at debt consolidation companies to help them.  Though there are some that might be reputable, many aren’t, and you will end up worse for wear than if you were going to do it yourself.

Here’s the basic premise of these “scam” debt consolidation companies.  They will look at all of your financial information, and if they accept you, which they almost always will.  At that point, you will have to pay them a fee, which can range from a flat fee of $500 to $1,000 most of the time, or a percentage of your outstanding debt, which can range from 10% to 15%.  That can be difficult if you were having problems paying your bills to begin with.

How will they help you find the money?  The first thing they will tell you is to stop paying on your credit cards and give the money to them.  What they’re going to do is build up a pool of money on your behalf, but of course this is going to put you behind with your credit card companies.  And, if you miss your payment to them, they have the right to take a percentage of the money they’ve been holding for you and closing out the deal you made with them, and you’re back to square one.

It’s actually their intention to get you into a collection status of some type so that they can negotiate a settlement that not only pays the creditors less money than what you owe, but they get a percentage of however much they’ve saved you in fees.  Of course, your credit rating takes a hit, but the debt is gone.  When they tell you that your debt will be paid in so many months, they’re doing that and building up your fund over that entire time so they can make a better negotiation with your creditors.  The lower your FICO score is, the better the deal they can make for you.

This won’t stop any of the phone calls or delinquent mailings you’ll be receiving for falling behind on your payments.  Your sense of relief is false, and it will affect your credit score in some fashion on the back end.  Remember, negative actions on your credit score will usually sit there for seven years.

What you end up paying for is someone to handle services you might be able to handle on your own.  Calling up your creditors and asking for more time or a short term deal is a much better way to go, especially if you have hopes that your status will change for the better in a little while.  And even if you’re not sure it will, you will still buy yourself some time and breathing room, which helps you think about other options that are hard to come up with when you’re stressed.

There are many components to debt consolidation that people need to do research and be aware of both the benefits and the dangers that may come.  Not reviewing either could end up costing more money, and hurting your status more, in the long term.

First, you may wish to consider speaking with a credit counselor. Credit counselors come in different shapes and sizes. You can find not-for-profit debt counselors, for-profit debt counselors, and even attorneys and law offices that specialize in helping consumers towards reducing their debt liability.

Second, you can consolidate your debt. This process involves taking all of your bills and consolidating them into one lower interest rate monthly payment. The most common approach to consolidate your debt is to take out a new loan. Homeowners with equity in their property can use that equity to take out a home equity loan, from which it can be used to pay down your debt.

Finally, you can settle your debt. Debt settlement can often damage a good credit score. This process allows for you to negotiate a lower balance with your creditors, at least those creditors who will agree to such terms. Your debt counselor will contact your creditors and explain to them that you have entered into a settlement program, which will reduce harassing phone calls.

Sources:

http://barex.biz/2009/credit-card-debt-relief-three-ways-to-get-out-of-debt/