Eliminate your debt without changing your life style

When you are in debt, it can be very overwhelming.
Often the pressures of debt can motivate you to
make a plan to pay it off sooner than if you just made
the minimum payments required by your lender. I
know this from firsthand experience when my wife
and I had $52,000 in debt when we got married in
2008. We were just starting off in life, and we had a
negative net worth that was very discouraging.
There's a happy ending to our story though. We were
able to pay off all $52,000 of debt in only 18 months!
It was a liberating feeling, and it's something that
motivated me to teach others to get out of debt in a
short period of time.
Two Ways to Pay Off Your Debt Quickly
The first way is to increase your income.
Traditionally, people will take on a second job, but
that could cause a significant change in the way they
are currently living. So the best way to earn some
extra cash fast is to sell items around the house that
you rarely use or just don't need any more. You may
be surprised to find there are power tools in your
garage that could be worth hundreds of dollars.
Perhaps you are into designer clothes, and there are
outfits you haven't worn in ages. Consider selling
these items online or in a garage sale to earn some
additional money to throw toward your debt.
The other way to demolish your debt is to reduce
your expenses. You may be thinking, "Isn't this
supposed to be about helping me get out of debt
without affecting my lifestyle?" The answer is still
"yes."
Before getting into what expenses you should cut,
you need to make a list of all your expenses on a
piece of paper. If you are into spreadsheets, then that
might be an easier solution. You can adjust the sheet
so it automatically totals all your expenses so you
know exactly how much money you are spending
each month. Once you determine which method of
tracking you want to use, collect all of your
statements for from the last month and begin writing
down each expense.
There are some expenses that are not "fixed" and
need to be addressed differently. Categories such as
groceries, eating out or entertainment tend to
include expenses that fluctuate from month to
month, which makes them variable expenses. The
best way to see what you spend in these areas is to
take the last three months of your bank statements,
and total up how much you spent in each category.
Divide that number by three, and you will get your
average spending for each category over the past 90
days.
Expenses to Consider Cutting
Now that you have a clear understanding of what
your expenses are, go through your sheet line by line
and ask yourself, "Is this category necessary?" If the
answer is "no," eliminate it. If it is still something you
want to spend money on, it is now your mission to
see if you can get that item or service cheaper
somewhere else. Here are a few categories in your
budget that are easy to trim (or cut completely):
Cable. Nowadays, there are so many options to watch
TV shows and movies, including Redbox, Netflix and
Hulu. Many of these options are significantly cheaper
then premium cable. There is even an option to get
major cable channels such as ESPN, AMC and others
through Sling TV, which only costs about $20 per
month.
Groceries. With the average family spending around
$4,000 a year for groceries, according to the Bureau
of Labor Statistics, this can be one of the biggest
budget busters. However, if you plan ahead and write
a shopping list before going to the grocery store, it
will help you avoid buying unnecessary items and
stay within your budget.
Entertainment. Perhaps you love to go to the movies,
and you don't want to give that up. You don't have to.
Most movie theaters give a discounted rate if you go
before 5 p.m., and some will offer even lower ticket
prices if you see a movie before noon.
Cellphone. It's common to pay over $100 per month
for a cellphone plan, but there are several companies
making cellphone plans more affordable. For
example, at Republic Wireless, you can get an
unlimited talk and text plan with 2 GB of data for only
$40 per month.
There are several ways you can eliminate your
expenses. If you take the time to create a budget, you
may be amazed by areas you can trim that won't
affect your lifestyle.
Deacon Hayes is a financial expert and founder of
Well Kept Wallet, a financial education company that
provides personal finance curriculum for people
across the world.