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Cut Your Expenses To Climb Out Of Debt

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One way to climb out of debt, or better yet avoid it altogether, is to learn how to stop wasting money. Americans are the most frivolous spenders on the planet. We also have the highest levels of personal debt. Of course impulse buys that end up in the attic can hurt the budget. But, it is our big-ticket purchases and routine spending that do the most to contribute to our debt over time and weaken our financial health.

For some, wealth is the result of investing well and saving. However, for many of us, it can come more realistically from not spending so much on items and events we just take for granted.

One of the first financial mistakes many make everyday is spending too much on premium coffee.
It’s fine to treat yourself once in a while, especially if you enjoy it more than your coffee at home or at the office. But, spending $3.00 for a fancy gourmet coffee drink everyday can add up, as can the calories in some of those creamy, sugar laden drinks! If you add up the dollar amount, it comes to about $1,000 in a year. Invest that same amount in an IRA annually and it can add up to a significant amount of retirement money. Even if you buy really good coffee to grind and brew at home, you will still save money. If time is your concern, making your own brew can actually be faster than waiting in a drive though line.

Use your public library to check out DVD’s and books instead of buying or renting them. Many libraries are now a part of a sharing network so collections have been expanded. Some offer online catalogs that you can use to browse and reserve from your home. Even digital audio books are available to download to your computer. Books are worth buying if you plan to use them again and again as a reference. But if it is a novel or magazine that you plan to read just once, borrow it from the library.

Pack a lunch. The least expensive way to eat lunch is to bring food from home. It’s also the best way to know exactly what it is you are eating. Frozen dinners are even less expensive than sandwiches from the local deli. When you do eat out, find the healthiest meal for the best value. Our fast food cravings have lead us to ever increasing obesity rates and diseases like diabetes, high blood pressure and heart disease. The childhood obesity epidemic is a national tragedy. The resulting medical bills will be a cause of bankruptcy among many individuals.

Slow down on the road. Driving at lower speeds uses less gas. Make sure you perform regularly scheduled maintenance on your car to keep it running more efficiently. Driving at the speed limits can also save a fortune on speeding tickets and the resulting raised insurance premiums. If you are considering going for a Sunday drive, consider going for a walk instead. Another option is getting out your bike. It should go without saying, but when buying a new car, look for fuel efficiency. Gas prices will continue to climb, so check out the new hybrids.

Save money on new cars by avoiding the expensive option packages. Do you really need a fancy global positioning system when maps have served you so well for years? Instead of spending thousands on fancy extras, spend the money on the base model of a better car or truck. You will be glad you did when it comes time to sell.

Maybe it’s time to reconsider all of your entertainment expenses. Add up what you spend on DVD’s, cable TV, movies, sports, magazines, clubs, bars, concerts, events and dinners. If you are trying to cut your debt, add up what you are spending on entertainment. How does the amount compare to the amount you are spending on debts and other expenses?

Don’t shop till you drop. Even if that new dress or shoes are a real bargain, ask yourself if you really need them. Survey your closet to see what you already have. If you do not really need more right now, if you can coordinate clothes differently or if you can focus on need verses the latest fashion avoid impulsive buying. Limit your shopping to once a month or once per season and take advantage of end of season sales.

Watch the wedding expenses. The average American wedding now costs $30,000. It’s not uncommon for the wealthy to spend over $100,000 for their nuptials. Keep in mind the meaning and purpose of the event, to celebrate your new marriage and to enjoy the company of friends and family. It is a shame to start out your new life with major debt from the ceremony. It is an unfortunate reality too, that 50% of marriages fail today. So, keep weddings simple and meaningful and do not get too wrapped up in the glitz and appearance.

Stop smoking. Smokers in America spent $88,000,000,000 on tobacco products last year. Depending on your location, a pack will cost you $3.00 to $7.00. Add that cost to your increased medical bills, and we are talking about a major expense. To be really smart, don’t think you are saving lots of money buying cigarettes by the carton just quit buying them altogether.

Put more time into selecting meaningful Christmas presents for loved ones. Instead of worrying about how much we need to spend, try to think about a gift that will bring joy to the receiver. Often, in haste, we buy expensive gift cards or random products online because we are just out of ideas. You don’t have to spend in excess to make the holidays happy.

Last but not least, there is our gambling habit. The gambling industry has changed its name to gaming to clean up its image. One new tactic to get you to spend more is installing slots that no longer accept coins; only bills discharged as electronic vouchers to put into another machine. If you are not dealing in real money, you are less likely to see your loses as real. Every time you walk into a casino, look around at all the glitz and know that you are the one paying for it.

By making some simple changes in how you spend your hard earned cash, you can avoid having a drained bank account, maxed-out credit cards and constant, nagging money anxiety. Think about how saving money in big and small ways can provide a faster road to long-term financial security and happiness.

Terry Gates

http://www.articlesbase.com/finance-articles/cut-your-expenses-to-climb-out-of-debt-65018.html

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May 3rd, 2010 | Tags: | Category: Smoking and Families

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