While staying out of debt requires permanently changing the way you view borrowing money, there are two simple actions you can take as you work on getting out of debt. Put simply: earn more and spend less. It’s a two-pronged approach that works well.
Briefly analyze your spending habits
Take a look at the things that you spend money on. Really look. What do you actually spend money on, maybe even automatically? At the very least, this probably means scrolling through your bank statement online to see what you’ve bought over the past month or two.
Now, which of those things could you give up or cut back on?
For example, if you have cable, do you really watch all of the premium channels? Maybe you could cut back to basic channels instead, or eliminate cable altogether.
What about your home phone? Do you really need voice mail and call waiting? You could buy an old-fashioned answering machine for $6 instead, and cut out those monthly voice mail charges forever. Or once again, maybe you could eliminate the home phone entirely. (Don’t people just call you on your cell anyway?) We did this, and it turned out to be a relief to get away from the sales pitches.
Ask yourself the “could I give this up or cut back on it?” question about every. single. item. on your list. Chances are you’ll come up with several places.
But I don’t wanna…
You may find yourself thinking “but I can’t give up that”. Or, if you’re honest with yourself, “but I don’t wanna give up that”.
(Many times “can’t” is just another way of saying that you don’t want to. You may choose not to give up certain things, but recognize that it IS a choice.)
Challenge yourself
Beating the “I don’t wanna’s” means challenging yourself to stretch. Could you give the thing up, if you really had to? As in, if the choice was give it up or go live on the street?
For example, how could you carpool or telecommute one day a week? Could you take public transportation, even once a month? Or what about getting a job closer to home to reduce gas expenses?
Brainstorm in this manner with every single expense on the list — even the expenses that you think are “fixed”. Oftentimes they’re not, if you get creative enough. Every step you can take to cut expenses will help.
Earn more money
Now take a look at the other side of the coin. What are some ways you could EARN extra money? (Beware here — do NOT choose things that require an investment or ongoing charges, even if it seems like you’ll come out ahead in the long run. You probably won’t.) Look for no-cost things you could do instead.
A few ideas are: walking dogs with Rover, babysitting, tutoring, cleaning up dog doo-doo, raking leaves, shoveling snow, pulling weeds, cleaning, etc. (See this idea book for even more suggestions.)
You could also look into getting a second job, whether it’s full or part time. If you’re a stay-at home parent, look into working during the evenings when your spouse is at home.
There are things you can do for immediate cash gains as well, such as holding yard sales, and selling books, CDs and unwanted goods on sites like Craigslist or eBay. Get creative.
If you can both decrease your spending AND increase your income, you’ll be off to a good start.
