Most adults struggle with debt, and many of us have been taught to think of debt as normal. Unfortunately, debt can frequently overtake our monthly income leaving us to take drastic measures to survive. Here are some ideas to consider to avoid sliding into debt and being forced to live paycheck to paycheck.
1. Spend Less And Save More
Doesn’t it sound stupidly obvious? The notion that in order to be financially secure, we must spend less than we earn is easier said than done. Unfortunately, the majority of American’s don’t complete a monthly budget which results in overspending and little to no saving.
If you’re tired of being broke and living paycheck to paycheck, it’s imperative you sit down at the end of the month and go over your bank statements. Write down how much money you made this month, as well as how much money you spent on bills, meals, and entertainment.
If you are spending much too much money each month, you should consider cutting down on your lifestyle expenditures first, then your food, and finally seeing if you can find cheaper energy providers, etc. By being honest with yourself and cutting out unnecessary spending, you can position yourself to save more money each month to avoid the need for payday or title loans.
2. Navigate Divorce With Needs-Based Spending
When a relationship breaks down and children are involved, money management can be challenging. You’re suddenly expected to provide for your home on your own, and your former spouse is expected to as well. So it’s essential to think about the needs of your children, and even your ex too.
Sit down and work out how you can divide your finances so that everyone can avoid going further into debt, at least until you’ve spoken to a divorce lawyer about your situation.
Speaking of divorce, it’s important to understand how expensive a split can be. If you’re both civil with each other, so you may want to consider holding off on the divorce until both you and your spouse are financially comfortable.
This will prevent both of you from sliding further into debt and most importantly, your children have the financial support they need to grow and thrive.
3. Pay It Off, Don’t Avoid It
Debt is not something we want to deal with, but if you find yourself struggling to pay the bills, you must make it a top priority to pay it off. If you have higher debts, consider looking into the best debt consolidation loan rates or lowering your lifestyle expenditures.
Depending on how ready you are for a change, you may want to forgo purchasing small items like coffee or other habit purchases if you can save money by making it at home. Small purchases add up to big debts so use those savings to get out of debt and start building wealth.
Meal prepping is also a great way to save money on meals to free up money to pay off your debts faster.
4. Don’t Feel Pressured To Say Yes To Spending!
If you can’t afford to pay for a group activity with your friends or go clothes shopping for the fifth time this month, you should politely decline. When you can’t afford something but do it anyway, you risk going over your overdraft, which may put you in a lot of debt and negatively influence your savings. Be prudent and only purchase items that you can truly afford and bring lasting value to your life.
If you enjoy spending, consider planning a date to treat yourself and slowly put small amounts of money away so that you can spend guilt-free, knowing you’re not putting yourself in a bad financial position.
5. Explore Cheaper Ways To Entertain And Have Fun
Entertainment is likely one of the largest monthly expenses you incur if you frequently go out for drinks at your neighborhood pub, which will add up quickly if you do it every week. However, you can have fun with friends and family in various ways, such as going for walks, having a picnic, afternoon tea, or movie and pizza nights.
Believe it or not, you can have fun without spending a fortune.
Make it your group’s aim to find the cheapest methods to have fun. This will save you a lot of money in the long run and help your family and friends enjoy cheap or free nights out.
6. “Vet” Your Bank Account Regularly
Finally, it’s all too easy these days to get sucked into a subscription service you don’t want or need. We’ve all been guilty of signing up for a gym membership in the new year, only never to use it. Anything you don’t need or use, from gym memberships to magazine subscriptions, should be canceled.
Not only will ‘vetting’ your bank account every few months eliminate needless payments, but it will also allow you to understand where you’re going wrong and make reasonable adjustments to your spending patterns.