Debt can be overwhelming – like so overwhelming that we don’t know where to start. Analysis paralysis sets in – or the opposite – ignore the problem and it might go away. Well, I know how you feel because 11 years ago when my husband and I bought our house, we were in debt from the mortgage, school loans, and a leased car.
That debt seemed to descend upon us so quickly that we were caught off guard. Then we quickly learned the financial decisions we needed to make to get out of debt. Below I’ve outlined immediate steps you can take to reduce your household debt.
- Eat at home: The cost of eating out is ridiculous for what you get for your money, ahem, like food that’s not even good for you. Make 15 family meals for the cost of one night out at a restaurant.
- Ride your bike: Hey, it’s still nice out. Get out and enjoy it while saving the expense of putting gas in the car (all the other expenses that get sunk into owning a car).
- Buy used: There is always something we’re thinking of buying – clothes, camera, picture frames, and concert tickets, whatever. Have a look around a thrift store or do a search on Craigslist. See how much you can save!
- Skip your next haircut: Getting on a haircut routine is somewhat of a racket. If you’re a dude, get a tube of gel ($4) and slick back the longer locks. Ladies, I go 6 – 12 months between haircuts, and my hair is as healthy as can be.
- Negotiate a bill: Time Warner cable probably has all kinds of notations on my account because I routinely call them and ask them to lower my bill. I’ve also been known to walk away from all services if the price isn’t right. My husband is the same way with our insurance. Take control of what you’re paying for.
- Fix something that’s broken: Do you have broken furniture or damaged clothing that you’re thinking of replacing? Don’t make me faint! You can easily fix or repurpose it and avoid the expense of replacing it. My son had a hole on the inside of his shoe that I patched with a scrap piece of leather and some hot glue. I looked at replacing the sneakers (because he loves them) and found they cost $50. I had originally paid $6 for them at a consignment shop. The unseen patch cost nothing. Savings $50!
- Sell something: We all have stuff laying around our house, taking up space that someone could be using. Whether it’s a dartboard, bike, old computer, or an ugly lamp, someone else could be using it. Take a nice picture; post it online; tell your network (friends and family) about it. You gain money and closet space. Win, win.
- Let your clothing provide temperature control: We have a challenge in our house as to how long we can go before turning on the heat for the season. We stretch it pretty far. If there’s a cool night, we just add another blanket. Enjoy the fresh air and heating bill savings as long as necessary. It’s not like your pipes are going to burst.
- Slow down: When you rush through life, rarely do you do it with financial discretion. Am I right? Take time to look at where your money is going and where you want it to go (like in smart investments).
- Don’t be afraid to ask: I love the saying, “if you don’t ask, the answer is always no.” So what should you be asking about? Anything! Ask for a raise. Ask to borrow a power saw from your friend so you don’t have to buy something you may only use once. Ask if anyone wants to hire you to take family portraits. You cannot wait around for other people to consider your best interest. You must advocate for yourself and be strong enough to handle rejection. That’s life. You win some, you lose some.