Being in debt can certainly take its toll on the average or below average income-earner. If you struggle with debt yourself, you will need to get rid of it without delay to improve your financial situation. Here’s the hard truth: there is no magical swish-and-flick method to get rid of your debt. You will have to make some tough compromises to secure your future finances, starting by changing the way you spend.
If a person is in debt, shouldn’t it be easy to cut back on unnecessary expenses? Unfortunately, it isn’t. We are impulse-driven animals. The urge to spend and seek instant gratification is too high. While it might seem relatively easy to ask an indebted person to control compulsive spending and eliminate all debt, that is rarely the case. A more practical and effective method is to zero in on particular expenses and make up your mind to get rid of them until you are debt-free. Here is a list of useful ways you can actually reduce everyday expenses and focus on repaying your loans:
Stop Paying Unncessary Costs
Are you aware of how much you spend each month on recreational activities like going to the movies? You may spend a lot more than you should, especially if the mortgage bills are piling up. Financial experts advise indebted wage earners to categorize expenses, such as for rent, groceries, and entertainment. Expenses like rent and food are essential, of course. But we can certainly do without activities like going to the movies. You can save a significant amount of money by eliminating unnecessary expenditure like buying movie tickets. Considering that movie ticket prices have been spiking in the last few years, you might be able to save over fifty pounds. Besides, you can still watch movies on DVD. Get a much cheaper local library subscription to get access to thousands of movie DVDs. There are also free movies available on YouTube.
Owning a car is really expensive, especially if you live in a city like London. In addition to the actual cost of the vehicle, you will have to pay certain recurring monthly bills for car insurance, petrol, auto maintenance, and so on. You can eliminate all these expenses by using public transport. The fare for buses and trains are so much cheaper than buying petrol for your car each month. If you already own a car, not using it every day will save you money on fuel expenses. Drive only when you need to, such as on weekend getaways. Using the metro is not only cheaper; it’s much faster during rush hour when just waiting in traffic costs so many pounds worth of fuel.
Are you signed up for monthly shopping subscriptions programs like Amazon Prime? These programs are designed to get you to spend. You are only nursing your compulsive habits with these shopping subscriptions. Just think about it; you are constantly bombarded with discounts, new offers, and emails for sales when you have shopping site subscriptions. You will then spend your cash on things you don’t actually need, like shoes, accessories or kitchen appliances. The little expenses that seem cheap at the time accumulate throughout the year, taking a good chunk off your household budget. Therefore, cancel these subscriptions to eliminate thousands of pounds of unnecessary spending each year. Instead, learn to shop with a list to control bad spending habits. The less you spend on shopping weekly, the more you can actually save to repay debt.
When you are in debt, it’s important to be proactive and take immediate steps to gradually reduce the amount you owe. You will have no time to be coy about how you spend your money. The longer you are in debt, the faster the interest would compound and grow. Thus, try the above-suggested tips today and take the right action towards being debt-free.
Consider Moving to a Cheaper Flat
Ideally, you should not spend more than a third of your income on rent. We would all like to live comfortably, and some Britons spend a considerable amount of money on flats and rental homes. If you are in debt, however, it’s wiser to say no to certain comforts and live within your means. That might consist of moving to a cheaper apartment on a temporary basis to save money.
For instance, if you are planning to rent a duplex when you can live in a single-bedroom flat, go with the cheaper option. You can save hundreds of pounds by slightly downgrading your rental options, and you can then spend on necessary payments like medical debt. When you are debt-free, you will have some extra cash to find a better rental residence or even finally apply for a mortgage.