Week 27: Downsizing Your Vehicles for Ultimate Savings

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You are reading Week 27 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

Sometimes the things we have to give up to get rid of debt may be tough to let go, but the end result is worth it. One thing you can do is focus on downsizing your vehicles for ultimate savings. Many people can’t imagine not having their car, but reality is there are many ways you can downsize and change your transportation situation to create more funds to pay off debt.

Have two cars but only one person works outside the home? This one is is really tough for those who feel stifled without the ability to come and go as they please. Reality is, there are few times when a second vehicle is mandatory in a situation like this. Especially if you are making two car payments. If you own one vehicle, it is only a matter of extra insurance and maintenance. In that instance, you may not want to give up the car as much as limit using it as much as possible. Otherwise, it is time to look for a way to sell the extra car and save this expense each month.

Have an SUV? SUV’s are great for many things, but commuting to and from work is not one of them. If your general use car is an SUV, it may be time to actually look at trading in for a more reasonable car. Lower payments, lower insurance and lower gas prices and maintenance are much more important than the possibility of needing that larger vehicle the one or two times a year it’s SUV status comes in handy.

Admittedly, I have an SUV and love it to pieces.  I know letting it go may be hard and it may not be practical.  You have to make the choices that are best for you and your family.  I just want you to consider the possibility that you could free up a lot of extra money by having a smaller car.

Spending more on repairs than a new car payment would be? Sometimes we have one vehicle that is paid for, but it is always breaking down and the result is high repair and maintenance costs. Sometimes it is actually cheaper in the long run to invest in a newer car with a payment that is lower than your current monthly upkeep costs.  IF you do need to invest in a new vehicle – a new-to-you car is a great option.  Consider a used car that is in better condition than your current vehicle.

When you are looking at the big picture of getting rid of debt, you must consider things like downsizing your vehicles for ultimate savings. Look at the big picture and focus on the total numbers and not just on the immediate changes it would create.

Remember the change won’t be forever.  Once you get our of debt and have a comfortable savings account, you can start putting money away for a new or upgraded vehicle.

Week 27 Challenge:

Take a look at your vehicles and weight your options.  Would it be wise to downsize?  If not, hold tight and wait for week 28 when we discuss other money saving options.

downsize-your-vehicle

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 26: Cancel Unnecessary Subscriptions – Don’t Miss These 6 Memberships

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You are reading Week 26 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

When you are working to eliminate debt, you have to literally think about everything in your list of expenses. One quick way to create a few hundred dollars in your budget is to cancel unnecessary subscriptions. There are many things that we pay for each year and could easily live without. This week we are going to focus on going over some of the common subscriptions you can do without, and a few suggestions on alternatives.

 Don’t Forget to Cancel These 7 Memberships:

  • Cancel your gym membership. Instead of paying $20-$50 per month for a gym membership, invest in a few items to have at home to help you get in shape.   Walk, jog or ride bikes for cardio. Spend the $20-$50 you will save the first month on some simple hand weights and a workout DVD for strength training.– Small 5 – 10 lb hand weights are perfect for most workout routines.
    Jillian Michaels DVD’s are popular and inexpensive
    Kettlebells are all the rage right now and you can find many videos on youtube for free.
    — Read this article on 5 Easy Home Workout Routines Without Weights.
  • Cancel magazine subscriptions. Many magazines are available for free or discounted in an digital version. If not, head out to your local library to read your favorite magazines each month. You can also ask for magazine subscriptions for gifts from friends and close family when your birthday or the holidays arrive.If you subscribe to All You Magazine for the coupons – order or renew during the promotions!
  • Cancel online site subscriptions. Occasionally there are clubs and sites online that require a monthly or annual fee to participate in.  Some of these are for work or education like kids learning sites. Evaluate the ones that truly offer a benefit. If not, let them go.Even $5 a month adds up to $60 a year. With 4 or 5 subscriptions per month at that rate you have created $240 in income for the year. That is a utility bill, small car payment, insurance or a weekend getaway.  Don’t forget about the annual subscriptions that you forgot even existed!
  • Cancel auto-renewal policies on subscriptions. Sometimes you don’t think about your subscriptions because they auto-renew via your credit card once a year. Go through your subscriptions and cancel any that auto-renew, so you aren’t charged before you get a chance to cancel the service. Are you paying $4.95 per year for something you don’t even use?
  • Cancel monthly subscription box services.   There are monthly subscription box services for everything from kids toys to makeup. These little monthly expense of $10-$30 can add up quickly and create up to $1000 in expenses over the course of the year. Cancel these and look for lower cost alternatives in stores.
  • Cancel newspaper subscription. Yes, people do still buy newspapers. If you are only using them for the coupons on Sunday’s, then negotiate for a Sunday only service. If not, look into the digital version online. Most newspapers have a discount for digital subscriptions or even offer the paper online for free.

You could come up with over $1000 in money in under an hour just by choosing to cancel unnecessary subscriptions. This is a great plan to help you get rid of debt this year.

We were paying over $80 per month for a YMCA membership.  While I loved my Y, I couldn’t see spending the money when I could walk outside instead of on the treadmill and add $80 to my credit card debt.

Week 26 Challenge:

Go through all your monthly subscription expenses and see what you can let go.  Spend an hour on the phone or online cancelling subscriptions or auto-renewals.

subscriptions

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 25: Are You Planning for Your Retirement?

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When we talk about getting rid of debt, we tend to forget that real debt resolution comes when you are also preparing and preventing an instance of debt coming back to haunt you.  Planning for your retirement should be a big part of your debt plan.  Just like savings accounts are not optional, neither is planning for the future.

We have talked about this before, but it is worth repeating. The things that cause debt are typically emergencies, medical crisis or poor spending habits. Planning for your retirement is going to protect you from emergencies and medical crisis that crop up in the future. While we realize you are here to get rid of debt, you also need to change the way you look at your income, expenses and financial situation.  You need to be in this for the long haul.

Social Security benefits are typically not enough to cover all expenses. Very rarely will your social security retirement check be enough to cover your average expenses and needs. Simply surviving until the age of retirement isn’t a guarantee for better income status. Many individuals are already living so closely within their means that shifting to a lower income can skyrocket them back into debt. While Medicare and supplements offer medical coverage, other emergencies and even long term care can crop up and create huge debt issues.

Take advantage of employee offered 401K or Roth IRA benefits plans. There is nothing easier than taking advantage of these options from your employer. The money is automatically deducted form your paycheck, and they often match up to a set amount contributed each year. Take advantage of this method of saving for your retirement for as long as possible.

Yes, paying off your current debt is very important. However, as you begin learning how to control your finances and the importance of funding your savings account, you will need to plan for your retirement.

While I advise getting rid of all debt, except the house, before starting to invest heavily in your retirement account.  Just know that retirement should be in the back of your mind.  You need to be prepared with proper retirement funds to offer protection in your Golden Age.  Forty years will go by faster than you think.

Week 25 Challenge:

Do you have a retirement account?  Does your employer match contributions?  Start investigating your options, so you are ready to dive in head first once your debt free.

retirement-saving

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 24: Credit Card Settlement Facts – You Need to Know

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You are reading Week 24 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

If you are currently facing large quantities of credit card debt, there may be a point when you want to make a settlement with your creditor. This week we are covering the basics of credit card settlement facts. This will help you to understand what a settlement is, and how it will affect you and your credit score in the long run.

In case you don’t already know, a credit card settlement is when you are able to pay a large percentage of the credit debt to clear your account and have the remaining balance forgiven by the creditor. If you have gotten behind on a debt and have received a letter from the collections department, it is very likely you have been offered a chance to make a settlement. You can also approach a creditor and ask for a settlement as well.

Settlements require 70% or more of debt be paid off. While on a rare occasion you can see a lower percentage accepted, typically the amount a creditor will require before they settle is 70% or more of the original debt owed. Usually they are figuring in you paying off the principal and they will be forgiving the interest and fees. This is not always the case, but should be understood so when you are negotiating you can understand why different creditors offer different things.

You have to pay taxes on the difference in original debt and amount paid. The amount that is forgiven by the creditor can be considered income by the IRS. Since it was not paid, but was forgiven, it is almost like it is considered a gift to you. You may have to account for this money on your income taxes and pay taxes on it.

Settlements do ding your credit report. While a settlement is better than having a civil judgment and garnishment places on your account, they will still be rated lower on your credit report. It will look good to potential creditors that you have paid off the debt, but the settlement will also ding you because it shows you did not fulfill your original obligation.

Settlements result in account closure. If you had hopes of getting that account back open to use later, a settlement will end that option for you. Account settlements almost always result in the account being closed completely.

When you are looking at the big picture of credit card debt and these credit card settlement facts, you will want to acknowledge that there are some times when it can be a great option for you. It can also be a bad option for some people. As with any major decision regarding your debt, make sure to crunch the numbers and look at all options before making a final decision.

Week 24 Challenge:

Read more about Credit Card Settlement facts before making any decisions and talk to a professional.

Credit-Card-Settlement-Facts---You-Need-to-Know

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 23: 7 Ways To Save Money On Groceries & Household Expenses

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You are reading Week 23 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

We will continue throughout this series to focus on the multitude of ways you can create funds in your budget to pay off debt. Here are 7 of the most common ways to save money on groceries & household expenses. Each of these methods is just one more step toward getting out of debt and finding financial security.

7 Ways To Save Money On Groceries & Household Expenses:

1. Use coupons and savings apps. Right away you have free and easy savings on food, household and health supplies just by using coupons. There are tons of options for savings that can easily cut your grocery bill by 50% or more. Savings apps are also great options if you aren’t into clipping the coupons. There are many stores with rewards cards or savings apps that you can scan at check out or upload receipts to and get cash back on your purchases.

2. Make your own household cleaners. Homemade laundry detergent, fabric softener, hand sanitizer, all purpose cleaners, natural bleach solution and more are easy to make for often times half the cost. This also results in a safer and more green home.  I have a post on how to make your own frugal green cleaners from your kitchen – no extra supplies needed.

3. Drop cable or satellite. We will mention this a lot throughout the year, but we often spend money unnecessarily on entertainment each month. Cable and satellite can be upwards of $100 per month. Instead invest in the $99 per year for Amazon Prime that offers free movie and television show streaming along with tons of free books, music and shipping.

Alternately, you can pay low monthly fees to places like Netflix and HuluPlus for streaming services.  We have a Roku for streaming movies on our TV, but I’ve heard the Fire TV Stick is a good option.

4. Go to prepaid cellular phone service. You can easily find prepaid cell plans that are a fraction of the cost of your current contract plan. Crunch the numbers and make a choice to go with prepaid in the future.

My sister-in-law recently switched to this option.  She’s saving a ton of money, has a phone and texting abilities while on the go, and uses her iPad for messaging while connected to WiFi at home.

5. Menu plan or use freezer meals. Last minute drive thru purchases or wasted food in your refrigerator are some of the biggest frivolous expenses in your grocery budget. Create functional menu plans and utilize them or freezer meals to guarantee meal time is smooth and you aren’t wasting food that is being thrown in the garbage.

6. Carpool when available. Gas prices yo-yo up and down all the time. Carpooling with your spouse, neighbors or friends to and from work can split expenses easily. It can also come in handy for taking kids to school, school events, practices and other after school needs.

If there is no carpool in your area, simply work hard to make sure your time out and about is used wisely. Plan your trips for errands well so you aren’t back tracking or making multiple trips when unnecessary.  Read these 6 tips for saving money on gas now.

7. Change the temperature on the thermostat. One simple way to save money on your heating or cooling expenses is to set your thermostat differently. In the summer set it at 78 degrees and wear looser lighter clothing while utilizing small fans or ceiling fans instead. In the winter set it at 68-72 degrees and add layers of clothing, throws, blankets and alternate heat like wood burning stoves as needed.

These ways to save money on groceries and household expenses are simple things anyone on any budget can evaluate and change. It’s often the little things like this that add up quickly to create hundreds of dollars per year to pay toward your family getting out of debt.

Week 23 Challenge:

Pick one new way to lower your expenses.  Start using coupons, shopping sales or driving less.  Adding in just one of these new habits to your daily routine can increase your savings over time.

What are simple ways you can reduce your monthly expenses?  Share with us your ideas.

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Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 22: Knowing When You Should Refinance Your Mortgage

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You are reading Week 22 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

So far this year we have covered budgeting, negotiating terms with your creditors, and even getting serious about your expenses. This week we are going to look at knowing when you should refinance. This is topic is usually looked at when you are working on your credit score, debt relief or simply trying to be more responsible with your money.

When interest rates have dropped significantly. Watch interest rates on housing mortgages. If you purchased at a higher rate than is currently available, you may wish to consider a refinance. Being able to get a significantly lower rate can offer you thousands of dollars in savings over the course of your mortgage repayment.  This can lower your monthly payments as well as the overall amount you have to repay.

When refinancing would give you funds to pay off debt at higher interest rates. While you may hate to extend your mortgage, there are often options to use your equity to actually finance for more than the original loan and give yourself funds to pay off debts that are carrying a higher interest rate.

When you are in debt and have decent credit, but feel yourself struggling to keep on top of everything, a refinance to get money that will pay off other debts can be a great choice. In the process, you must establish better financial practices and not recreate the debt you just paid off.

  • Make sure it is fixed interest rate and has no balloon payment.
  • Remember you can always pay more to your principle each month than what is owed.  Don’t go for a shorter term loan that will lock you in on paying a higher monthly or bimonthly payment.
  • Make sure the loan repayment will be lower than your current mortgage and loan repayment.

When you are working to get rid of debt, you must look at all options available. Knowing when you should refinance could make or break your financial life. Finding extra funds that you can pay off debt and create lower monthly payments at better interest rates is one of the best and easiest ways to get rid of debt.

Week 22 Challenge:

Discuss ALL options with your lender and financial adviser before making a decision.  Consider the added expenses of refinancing and what those fees will do for your total mortgage amount and monthly payments.

We looked into refinancing our home a couple of years ago.  After weighing all the options including our homes current value and how long we planned to stay in the home, refinancing wasn’t a wise option for us.   Knowing when you should refinance is all about doing the research and crunching the numbers.

Knowing-When-You-Should-Refinance-Your-Mortgage

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 21: Evaluate Your Success And Make Changes

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You are reading Week 21 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

This week as we look at your debt relief goals, we are going to stop and evaluate your success and make changes. This is necessary, so you don’t find yourself in a rut and begin getting discouraged. Periodically pulling out your budget and list of debts to make changes is what will keep you successful financially.

Have you been able to stick to your budget? Pull out your spreadsheets for the last few months and evaluate if you have managed to stick to your budget. This is also the time to adjust for things that may have fluctuated. Perhaps utilities were more than expected.  Add in the additional funds needed to your budget, then see what areas you can subtract that from. Ultimately you want to maintain the same amount of savings and debt repayment or more.

If you’re lowered utilities or expenses – that is awesome!  Add those savings to your debt repayment plan.

Are you still in default on accounts? If you are looking at your budget and finding that you are still in significant default on accounts, you may want to go back and reevaluate our posts about when bankruptcy is a good choice and how to avoid bankruptcy. Accounts that are in default for multiple months are much harder to get in check again.  I’m still not suggesting bankruptcy, I’m just suggesting you go back and read those articles again.  I would also suggest getting professional advice if you have yet to take that step.

Have you found increased income?  Have you asked for a raise, taken on a second job or downsized? If your budget is still not providing for debt repayment, it may be time to look at these options again. Continue working on increasing your income and lowering your expenses throughout your journey to getting rid of debt.

What areas need improvement? This is when you have to just get brutally honest with yourself. Look at your spending habits. Have they changed? Check the expenses in your budget and see which ones could be lowered even further. Can you menu plan or lower your grocery budget even more? Maybe it is finally time to step toward dropping your satellite, cable or entertainment budget? Check for areas that still need improvement.

At this point in your journey, it is time to truly evaluate your success and make changes. If getting rid of debt is your goal, it is time to get serious and make some big changes to see this happen. Work smarter and harder to see your financial goals met.

Give yourself a pat on the back!   If you’ve been following along with the series and have been working to make changes, no matter how big or small, stop and give yourself a pat on the back.

Congratulate yourself on sticking with your goal to eliminate debt.  You’ve earned it!

Week 21 Challenge:

Pull out your budget and adjust as needed for current debt, expenses and savings goals.  Make a note of how much debt you have reduced in just a few months.  Stop and acknowledge your accomplishments.  It’s not all about how much further you have to go.  It’s also important to celebrate how far you have come.

Take-time-to-Evaluate-Your-Success-And-Make-Changes-to-your-budget

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 20: Get Started Using The Envelope Method for Debt Relief

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You are reading Week 20 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

If you have looked for any information in the past regarding getting out of debt,  Dave Ramsey is a familiar name.  One of the most popular methods he presents is using the envelope method to help stay on budget each month. This method is a great way to stop overspending. We are going to look at our version of the envelope method this week and hopefully inspire you to use it as well for future months budgeting. While the concept came from Mr. Ramsey,  you should adapt it to suit your needs.

Using The Envelope Method:

The envelope method is recommended because it offers you a chance to see money as it disappears to pay bills. Once the set amount of money has been spent, you have no more to spend. Simple as that.

The envelope system is a great visual and budgeting tool.

However, I am much more comfortable continuing to have my pay check direct deposited into my bank account, and scheduling bills to be paid directly from there. For things like your utilities, mortgage, insurance and vehicle payments continue to pay directly from your bank account. I recommend setting up bill pay with your bank so the check is sent directly from them.  There is no fee and you know it will arrive on time every time.  This step will help eliminate hidden fees as we discussed a couple of weeks ago.

Withdraw cash for groceries, gas and incidentals. At this point, stop by your bank and withdraw the monthly amount budgeted for groceries, gas and incidentals. These are some of the areas we tend to overspend quickly. This money should be there to cover everything from your grocery and household needs, to incidental splurges, lunches out, kids needs and gas.

Once the money has been spent, you have no more to spend until next month or the next payday. This gives you a visual and physical method of understanding how and when you are spending your money. You can put cash money into envelopes designated for each of these areas of purchase, or keep it together knowing it has to work for all of those.

Personally, I separate the amounts out into envelopes.   It’s easier for me to track my spending this way.  I have a separate envelope for each of my “extra” categories.  If you looked at my envelopes you would see groceries, eating out, entertainment, Dana allowance, Derrick allowance, kids needs, house, and gifts.

When money is gone create a spending freeze. This is where the real savings begins. When you set your budget and can’t stick to it, do you typically just pull more money out of the bank to pay for things? Or perhaps you have been using credit cards to make up the difference? When you use the envelope method, the idea is to stop spending when money is gone. On top of that, you hope at the end of the month you’ll have leftover money in your envelope to put back into savings.

When you are out of money – you have to stop spending. No more groceries. No more gas. No more special lunches out, etc.

Another approach is to “roll” the cash from one month the next.  This is helpful if you have a special event coming up.  Maybe you and your spouse want a special dinner out that will cost more than your typical months budget.  Save money prior to the event, so you can splurge debt free.

Every few months I would take out my leftover money and make a deposit into my savings account or into checking to pay off more deft.

If you find yourself going over the amount of cash you have each month.  It’s time to reevaluate your budget and spending habits.

What you need:

The frugal method is to use standard letter sized #10 envelopes.  You can simply write the category on your envelope or tape a spending record on each. I used this printable envelope label when I first started with the cash system.  Recording my expenses forced me to keep track of where my money was going and allowed me to make adjustments based on my spending habits.

You will also need something to keep your envelopes together. Your cash envelopes will become your new wallet so to speak.  I found this one as an example, but you can usually find them in the $1 Spot at Target.

If you prefer to get fancy, purchase Dave Ramsey’s Deluxe Executive Envelope System or a this pretty version of the envelope system.

Using the envelope method is a highly popular way to help you focus on where and how you are spending money. As a result, you often find yourself having a much easier time paying off debt. As you see your money physically leaving your possession you will be less likely to use it.  Trust me – it worked for us!

Week 20 Challenge:

Give the envelope system a try.  Create your envelopes and commit to only spending the amount of cash on hand.

Using The Envelope Method

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 19: Get Serious About Your Household Budget

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You are reading Week 19 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

We have covered a lot of topics so far this year regarding getting rid of debt, and that included our starting posts that told you how to make a functional budget. This week we are pausing to look back and get serious about your household budget.  It’s time to look at some drastic ways to reduce your expenses, so you can pay more toward your debt or save.

Cut back your grocery budget. You can’t cut out your grocery budget, but you can change it drastically. Coupons are free and easy to use to help lower your budget. Various savings and cash back apps for your smart phone are excellent choices as well toward lowering your grocery costs. Cutting back on meats, alcohol and junk foods are other ways you can lower what you are spending. Using menu plans and even freezer meals can stretch that budget even farther and help you to find wiggle room to apply toward your debt.

There are tons of posts to help you get started already on my site.  I have a series on how to save money at your favorite stores which may help reduce your grocery expenses.  If you’re not interested in coupons, take a look at my frugal living articles to help you live well on less.

Eliminate your entertainment budget. This one hurts, but it is necessary. Switch from the weekly entertainment budget to finding free things to do with your family or spouse. Watch movies at home on your streaming service like Netflix or Amazon Prime.

Play board games, or watch a prime time TV show together. Go for walks, visit free art galleries or take in local free musical performances. Halt eating out in favor of making meals together. Eliminate this extra item in your budget and easily free up $100-$200 a month.

If you live in Hampton Roads, I share a weekly round-up of free weekend activities. You can also search for a blog with local events in your area to stay busy for less.

Lower your utility costs. We are spoiled. Yes, that is brutal and may not apply to everyone, but reality is we have become accustomed to the comforts of cool houses and hundreds of TV channels.

Things like changing the temperature on your thermostat, using ceiling fans and avoiding use of the oven in the summer can keep your home cooler.

Throw on extra layers, use wood heat and invest in proper insulation of your windows and doors in the winter. These simple tricks can be the difference between saving or spending hundreds of dollars each year.

It is time to get serious about your household budget, and focus on really seeing your expenses and spending habits for what they are. When you are struggling to pay the minimum balances you sometimes have to adjust your life to reflect the need for more income. To get rid of debt you must make sacrifices. This doesn’t require a diet of beans and rice, but does mean you will need to focus on what is important versus what feels good and is convenient.

Week 19 Challenge:

What expenses can you cut or reduce to lower your monthly expenses?  Jot down ideas on ways to seriously cut the extra expenses from your budget.  Add up the amount and post it somewhere you will see it daily.  Every time you want to lower the thermostat this summer, think about how much additional money you are paying toward your debt and how good it will feel to finally be debt free.

Get-Serious-About-Your-Household-Budget

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 18: How to Find & Eliminate Hidden Fees

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You are reading Week 18 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

Did you know that you may have incurred undue debt just because you aren’t paying attention to hidden fees in your accounts? This week we are going to show you how to eliminate hidden fee debts. Even the most careful financial person will miss out on hidden fees that can accumulate on your balances quickly.

Tips to Eliminate Hidden Fees:

Check for monthly account maintenance charges. Everything from your bank account to a secured credit card may be charging you a monthly fee just to maintain your account. While it is common for these fees to be applied, there are many instances where you can switch to a different account or ask for a fee to be waived if your account is in good standing. Shop around for a bank or creditor that doesn’t charge you a monthly maintenance fee.

Personally, I would NEVER pay a fee just to have a checking or savings account at a bank.  Don’t pay extra to let the bank hold your money!

There are also countless credit cards that don’t have an annual fee.  If you’ve previously signed up for a card that waived their fee for the first year, do you know when that fee will be charged?  It might be time to call and make a change to your account.

Find out what falls under “surcharges” on your accounts. At the bottom of many utility, credit card and banking bills you will find items listed as “surcharges”. It is your right to know exactly what is included in those charges. Ask for a breakdown, and dispute items you don’t feel apply to you. While you won’t always be able to have charges removed, you may find that you can. It is one more hidden fee debt that you can rid yourself of.

Go over insurance policies to see what they actually cover. Insurance is a sticky thing to research. Going over insurance policies may be boring, but it can make the difference between paying for something you want and need, and paying for things you will never use.

Check over your auto policy, home owners, renters, travelers, life, dental and vision insurance to make sure you are paying for something that is worth your money. Insurance is a necessary part of life, but sometimes policies vary so widely you will need more information to know you aren’t paying fees for things that won’t apply to you.

Now, I’m not suggesting dropping coverage just to save a few bucks.  The point is ensure you’re not being charged for fees or extra’s that don’t apply to you.

A few insurance policy “hidden” fees:

  • Administrative fee to break up your 6-month premium payments into monthly installments.
  • Fee added for automatic bill pay or pay-by-phone.
  • Extra fee for roadside assistance (which you don’t need if you have AAA.)

ATM fees.  While not hidden, you may be incurring fees each month for using ATM’s that aren’t part of your banks network.  If you go to the ATM twice per week and get hit with a $2 fee for each transaction, you are wasting $16 per month!

As with every step you take toward getting rid of debt, the little things shouldn’t be overlooked. Literally every single dime you can save is one step closer to being free from debt.

Week 18 Challenge:

Pull out all your bank statements, credit card bills, utility bills and insurance policies.  Are you being charged fees that can be eliminated?  Mark up your statements and hit the phone.  Some fees you might have to accept as part of your policy, but others maybe negotiable.

How-to-Find-and-Eliminate-Hidden-Fees

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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