People have gotten into debt for a variety of reasons. Some is due to their own fault while others aquired the debt from circumstances beyond their control. While it’s important to understand why you got into debt so that you can take the necessary steps so that it doesn’t happen again, the fact is that there is really only one thing you can do to free yourself from it: Pay it off. Here are 10 tips I’ve used in finding extra cash to pay down more than $10,000 in credit card and auto loan debt in just over 18 months.
Wash some savings from your utility bill
Wash your clothes less often. Really. I got in the habit of wearing my clothes once, and throwing them in the wash. Then I thought about how wasteful that was. I work in an air conditioned office and have a pretty low stress job. I just don’t sweat that much. If you do, by all means wash away, but do so on the cold water setting and air dry your clothes when possible. Clotheslines are great, but sometimes the weather doesn’t cooperate. For times like these, I use an inside rack. They’re relatively cheap, and fold up for out of the way storage when not in use.
Have you ever thought about how much money goes towards food. Just think how much you could save if you stopped eating! Okay, so that’s really not practical, but you could stop eating out. Plan meals using ingredients on sale every week at the grocery store, and make your meals at home. Not only will you save a bundle, but you’ll learn the much forgotten art of cooking and you’ll actually know what’s in the food you’re eating.
Drive home the savings
If you drive, try to drive less. Plan trips to minimize the mileage you travel. Also, if you have auto insurance, shop around. I cut my monthly insurance bill in half by comparing several insurers to find a lower rate. Then I raised the deductible and dropped collision coverage. I would not recommend dropping collision unless the car you drive is worth less than (or close to) the premium you’re paying per year. I also got a discount for combining my auto and homeowner’s insurance.
Cut the cable or consolidate
If you make many long distance calls, or absolutely must have high speed Internet, then consolidating your phone, television, and Internet service into one provider (and one bill) may actually save you money. Alternatively, if you don’t make long distance calls and can get by without high speed Internet, ditch them all together. I know many people who have cut the cable and lived without for a year or more to accelerate their getting out of debt.
Go pay-per-use cell (if you must)
I hate phones, cell phones even more so. But I drive almost an hour to work and back everyday, so I like to have a cell phone “just in case.” When I first got a cell phone, I didn’t know what I was doing. I signed up for a 2 year service through a big named provider. It cost me $45 a month and I hardly ever used any minutes. When I was done with the plan, I dropped the service and got a pay-as-you-go phone. It costs me about $10 per month. That’s a savings of $420 per year.
Shop for savings
Never buy anything unless you need it and it’s on sale for 15% or more. Do all your shopping on Sunday – use the Sunday paper for coupons, and combine driving into single trip. My wife spends $2 every week on the local newspaper, but she saves an average of $30 on groceries. Grocery stores play games with prices, but if you know how to play along with coupons you can really save a bundle, and eat healthily too.
Cool your jets
Turn your water heater down to the lowest safe setting. If it’s set too low, bacteria may grow, but too high and you’re heating water when you probably don’t need it.
Load up for efficiency
If you have a dishwasher, by all means use it. Dish washers use less water than washing by hand, but only if you run the washer with a full load. Besides the water savings, you’ll save your back and a lot of time by not washing by hand.
Get to know your biggest fan
Use a fan instead of central A/C. Many times simply providing some air flow is all that’s needed to cool off. This is especially true if it’s a cool evening. But even if it’s too hot for a fan alone, combining forces with the air conditioning will save money. Use A/C to cool the house or room somewhat, then use a fan to circulate the cool air further. There are few greater energy hogs than an air conditioner and with the cost of energy at all time highs, this is a “quick hit” for some big summer savings.
Skip the Latte
Simply making coffee at home will save you an easy $30 per month. That alone is enough to cover most if not all of a minimum payment on a credit card balance. If you brown bag your lunch instead of eating out every day you’ll save even more. I used to get my lunch at a deli every day at work. Then I realized I can buy a pound of lunch meat and enough cheese, lettuce and tomato to make enough sandwiches for a week for the money I was spending on just one meal at the deli.
Once I freed up some extra cash from the tips above, I put all of it toward my debt with the highest interest rate first, and then each subsequent debt until they were paid off. After that, I found that I had gotten used to many aspects of frugal living and was able to continue to keep my spending down. Now, instead of paying off debt for things I bought when I couldn’t really afford them, I put the money into savings until I can afford them. My wife and I have been debt free (except for mortgage) for 3 years now. It’s a glorious feeling.
Image courtesy of ziggiau