Saving Money and Cutting Debt
Reduce Credit Card Debt, Hunt for Bargains and Become Debt Free
Sep 18, 2008
The economy survives on the basis of debt, but those who have it always struggle the most. It eats up increasingly high percentages of net income leaving less money available to survive on. The debt cycle has to be broken in order to become debt free.
Where Does the Money Go?
Put together a full breakdown of all your incomes and expenditures and identify where most of the money is being frittered away. This will allow you to work out the areas where there is the most scope for savings.
Make Money
Making extra money never hurts so take advantage of any overtime that is available, especially if it attracts a premium rate. If there isn't any, why not get a part time job at weekends? It will allow you to pay off your debts that much faster.
Get a Remortgage
If you have good credit and haven't remortgaged in a long time you are almost certainly paying an inflated Standard Variable Rate (SVR). Why not remortgage your home, get a better rate and reduce your outgoings by hundreds of pounds?
Save on Utility Bills
Use one of the many online resources to identify cheaper sources of electricity, gas and insurance. Unless you possess perfect market knowledge the chances are you don't have the most cost effective source. A simple online scan can help save money.
Discount Clothes
Don't buy the latest fashions as soon as they come out, get your designer clothes from discount sources, such as TK Maxx, Bicester Designer Village and Portsmouth Harbour. You will save up to 75%.
Cheaper Food
James Kirkup, Political Correspondent for the Daily Telegraph, reported that "Food prices are accelerating at their fastest rate since records began, fuelling a rise in the average family's shopping bill of £750 a year." How can you save money?
- Take advantage of two-for-one deals in local supermarkets. Certain things aren't needed now, but buying them when they are cheap for later is sensible.
- Identify foods in discount sections that have a short shelf life as you can get things at a fraction of the price.
- Buy own brand products as many are just as good as their branded equivalents. It is advisable to test buy a single item before buying many as you need to be sure that a quality food has been bought. Some are better than others.
Pay off Debt
Now that money has been saved, don't just spend it on a foreign holiday or new electronic equipment. If you can reduce the overall debt burden you will have more left each month. Try to pay off the higher interest bearing finance first, such as credit cards bills.
Whilst people earn 0.1% on their current account, it is not uncommon for these same people to be paying 18.9% on their credit card balance. What's more, many only pay the minimum payment each month meaning that a debt can last for as long as 40 years. Don't let this happen to you!
