Pattie Lovett-Reid: What you can do right now to eliminate debt
We talk about debt all the time and it is overwhelming and can feel like you’ve hit the wall. No one seems to be in as much financial trouble as you, and where do you even begin to turn things around?
If you are serious about getting out of debt, start looking at where you are spending money on a daily basis. Begin by knowing how much money you have coming in. That for some is the easy part. It gets tougher seeing where you spend your money.
This is crucial and where the devil is in the details.
I surveyed family and friends for their best frugal living strategies and here is what I found:
1. Stop eating out, drinking out and going out. That means stop hitting the fast food restaurant on your way home or the local coffee shop several times a day. Prepare your meals and coffee at home and save a bundle. Plan your grocery trips and start couponing. Use a calculator, set as budget and only buy what you need versus what you would like.
2. Consignment shopping is a great way to save money. It is never worth going into debt to try and look good. Go shopping in your own closet and you will save a bundle. While you're at it – stop shopping online unless it is for items that have been pre-loved and gently used. Sell your unwanted items. Someone might think they have found a gem in your trash.
3. Sell your car. Gas, maintenance, insurance and car loans add up. Take the money and apply it to your debt.
4. Cut up your credit cards. Not literally. But tuck them away and use them in only emergency situations.
5. Stop investing. There is no point in earning a minimal return in the market when time and compounding is working against you paying an eye-popping rate on your debt. While you are at it, look for ways to consolidate your debt to lower the overall interest payment.
6. Consider ditching – for now – expensive activities. Golf memberships, exotic vacations, ski trips and cycling clubs, to name a few. Dump your gym membership and go out for a run or download a fitness app.
7. Comparison shop for the best deal going. This doesn’t mean the cheapest, it means the one that will result in the best performance for the money paid.
8. Stay focused. Once a little progress is made it is so easy to slip back into bad habits. Set a goal, stick to the plan and be an overachiever.
9. Just say no. Embrace the freedom that comes with simply saying “no” to expensive evenings out, hobbies, vacations, designer duds, etc.
10. Solicit others to go on a spending freeze with you. Get a “frugal buddy” so to speak. If you get tempted to spend, reach out to your support group/person. Better yet lead the charge. Be the person others aspire to be. Lead by example.