A quick Google search will reveal some alarming facts about today’s looming consumer debt crisis. In fact, according to the Federal Reserve, consumer debt in the first quarter of 2018 broke the record, with a rise of 3.3 percent, or almost $4 trillion. As a consumer, a shift in your lifestyle, particularly in how you manage your personal finances, needs to happen so that you can avoid the same fate that millions of Americans are facing today. And where better to start than to put out the fires that are currently taking a toll on your budget? By reducing your current debt, you get back the control you need to start saving responsibly and effectively.
Update Your Budget
Creating a budget is easy, but it tends to be too vague sometimes and/or becomes irrelevant once new circumstances in your life occur. Make it a point to regularly update your budget plan to reflect these new changes, whether it’s a pay raise or an increase in your utility bills or monthly rent. Keeping your budget plan up to date gives you accurate information regarding where you are currently versus where you want to be in a given time frame, be it in the next six months or six years. Financial advisers and debt experts, like Nationwide Debt Reduction Services, can also help you craft a precise budget that is easy to follow, can lower your debt, and plump up your retirement nest.
Cut Back on Non-Essentials
Yes, everyone has non-essential expenses, regardless if they admit it or not. It could be the monthly magazine subscriptions that you don’t even read or multiple content-on-demand accounts that you don’t get to watch since you’re out at work. Having Hulu, Netflix, HBO, Amazon Prime, and cable on your TV can cost you $200 or more per month. Use a single provider, at least until you’ve paid off your debt. Limit your expenses to essentials and investments including food, shelter, and utilities.
Be Creative With Entertainment
Movie nights every weekend, road trips with the family every month, and barhopping with friends every Friday can burn a hole through your wallet. There are many more ways to entertain yourself and your family/friends without having to part with your money. All you need is some creativity and timing. Rather than eat out at a five-star restaurant with friends, do a potluck or cook at home. Rather than watching movies and hanging out at clubs, host a game night, which is more intimate and peaceful, not to mention inexpensive.
Cut Your Credit Cards
In half, literally. You don’t need multiple credit cards. One will suffice in building your credit score and giving you the financial leverage when you need it. Compare the credit cards you have and see what sort of rewards they offer. Some cards are great for travel and can accumulate miles faster while others are offered with lower interest. The annual fee charged by your credit card provider is another crucial factor to take into consideration when choosing which card to stick with. Some are free of charge while others cost up to $100 per year.
Update Your Insurance Policy
Payments on insurance policies aren’t fixed; they move around, and you can easily reduce your monthly payments by re-shopping and updating your policies. Whether you have an auto, home, or life insurance, see to it that you are regularly looking at current costs of insurance. If you find one that is cheaper, either use it to renegotiate and lower the terms of your current policy or switch to a new provider.
Get Expert Help
Advice from experts, like Nationwide Debt Reduction Services, can help you reduce your debt, and more importantly, redirect you to the right path so that you don’t find yourself in a similar situation in the future. A company, like Nationwide Debt Reduction Services, can help you negotiate lower interest rates on your debt payments. These experts have strong relationships with creditors, which can result in as much as a 50 percent reduction on your current debt. Consult experts to see if a debt settlement or debt reduction best suits your particular case. Regardless of which one does match your needs, Nationwide Debt Reduction Services is a worthwhile investment that can have a long-term financial impact.
Debt can cripple your finances. Left unchecked, you’ll spend your years working from paycheck to paycheck without saving any money for your retirement and family. Use the six tips above to help you reduce debt without necessarily living off of instant cup noodles or working 80 hours a week.