How to get out of debt and start over
I have a friend. Well, I have several friends who are broke. I do not pick my friends based on their financial wealth. I do not care about what they have. I do worry and have spoken to them about their finances because they asked. I want to help them by teaching them how to get out of debt and start over. There were three common excuses they had for being broke. The first was they couldn’t find the right job. I am not sure there is a “right job”. This is what I told them. Make a list of what you like to do and what you want to do. Then figure out how to create that job. In the meantime find a job that fits your schedule and go to work.
If you want to knock out your debt you need to do two things increase your income and decrease your spending. It is really that
simple. This is how we figure out how to get out of debt. We made a list of expenses.
How to get out of debt and start over
Account interest rates (transfer balances if you have them to cards with lower rates)
Account interest rates if you are saving are you making the most on your money?
Then we called each company to figure out how to reduce our cost by 10%. we had to pick plans based on what we could afford not what we wanted. We took on our biggest expense which was our mortgage. We feel like all we are paying is interest and after 10 years we aren’t really closer to owning our house. That is just sad. We decided to pay on the principal every month and we decided to make an extra payment a year. We took our tax return and made this happen. This will result in us owning our home much sooner and that is a huge step to becoming debt free. The next thing I did was check my insurance coverage. We were paying for things that didn’t apply. They were defaults in the policy. I went through line by line to make sure each line was applicable and worth the coverage. I looked and I was paying double having a $500 deductibles on my homeowners. I decided that if there was a major issue we could come up with $1,000 to cover it and we would be willing to assume the risk for repairs under $1,000. It would save us a lot of money and in ten years we haven’t used our policy.
We then took the money we saved and applied it to debt. We paid of almost 100,000.
The second excuse I heard was we need these things. I explained that looking at what is a need and a want is important. You have to evaluate what is a need. You do not need TV or cable. It is something you want. I actually need TV for my job I get paid to review shows so it is a business expense and a real need. I do however, not need to have my nails done, eye brows waxed, and hair colored professionally. I gave up my hair except for twice a year. The rest of the time I color it at home. I believe it saves me $54 every 6 weeks. I spend $250 a year and then about $40 in hair color. That is around $300 a year for color I was spending almost $1000 a year on color alone. I also get my hair cut every 10 weeks instead of 8. That cut out two hair cuts or $100 in services. I let my nails go for 3 weeks instead of two for an additional savings. You have to look at your wants and figure out how to make them cost less. I love to eat out now I find a coupon and make plans around that. That has saved me 50% off of my bill.
The third excuse I have heard is there is no way to resolve this. I will say there is always a way out. You got yourself into debt and you can get yourself out. There are always jobs out there. You need to work. You can find jobs on odesk or you can ask friends if they know of anyone hiring. You all have skills. You can do things from your home, watch children, enter records, or find something you love to do and do it. You are smart enough to do this. The other thing I have done is figure out the services that we currently use and figured out a way to barter. That has saved my family about $400 a month. I am currently do marketing and social media for the places that I use their services. It is less than I would have gotten paid but I do not have to pay taxes on my services and I now have the extra $400 to put back into our budget to pay off our debt which is currently just mortgages. If you add that up it is almost $5,000 a year I am helping my family save. I say be bold and ask people if you can work in exchange for services. I have found that people are always open to making deals. This will help you begin to crawl out of debt it isn’t easy but think of the benefits.
I believe in you! Let me know how i can help you conquer this!
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topic: How to get out of debt and start over