The holidays are over. The decorations have been packed away, and now the sheer reality of what you spent on all those good tidings is staring you in the face. Bills are beginning to show up in the mailbox. It isn’t pretty. Let’s look at four simple ways to bring down your debt:
Round up the payment. This is an easy tip that you can use on almost any type of bill. Let’s say you financed $17,000 for 60 months, at a rate of 4.65%. Your payment comes to $318.09. By rounding your payment up to $325, you can pay off your car a month early. If your budget allows you to change that payment to $400, you knock 11 months off your payment schedule. Don’t use the skip payment option if it’s available – just a few times can stretch your loan out several months and add interest to your bottom line. Go to Bankrate.com to calculate your own savings.
Negotiate. You can use the rounding-up method on your credit cards, too, and those are your biggest monthly money grabbers in terms of interest. But take a look at your statement. Are getting the best possible deal from your credit card company? Make a call to customer service and ask if the would consider lowering the interest rate based on your payment history. Don’t take the first “no” for an answer – but be polite. Ask for a supervisor, and explain that any type of decrease in the interest rate would be helpful. Sometimes you can negotiate a lower rate for a limited time – if you are given this opportunity, make sure you take advantage of it and pay as much as possible toward the balance. And don’t miss a payment; doing so could jeopardize any negotiations in the future.
Bring down the waste. It’s time to tighten the family belt. Take a good hard look at how much waste goes on in your house. Do you fix dinner and pile the food on everyone’s plates, only to scrape most of the meal into the garbage? Plan smaller portions, or incorporate meals from the leftovers. A single roasted chicken can be stretched for several meals. Boil the bones and add seasoning and vegetables for a simple soup. By replacing a fast-food meal for four with one at-home meal of leftovers, you can keep from $6 to $30 in your pocket. If you truly crave the drive-in, check for coupons or two-for-one deals before ordering.
Set up a budget. If you have never followed your money, now is the time. Download a spreadsheet or find an online budget planning system that fits your particular needs. Count every penny of income and track every penny that goes out. Discover your weaknesses in spending and work to improve and cut back on spending without feeling as though you are deprived of every form of entertainment. I’m sure there was at least one great family board game or jigsaw puzzle under that tree. Open it up and enjoy some quality time with your family. Having fun is the most important way to keep yourself on track.