5 Smart Moves That Will Make You Triumph Over Debt

Debt is such a burden; it causes stress, insecurity, and friction in your marriage and your life. All of those wonderful things that money buys, most - are not necessary, and when the bill comes, it is depressing.

I know - I’ve racked up debt in my life - to the tune of $15,000.00 in credit cards alone. It felt as if I was working just to pay my debt. And … if you don’t, or you’re late, there goes your credit, so life becomes mundane, and burdensome because everything is about paying the bills. [Editor’s Note: Find better ways to spend money other than using a credit card.]

The 5 Smart Moves

First and foremost, you must re-assess your spending habits. Are you spending over your budget? Do you even have a budget? Are you buying things just because you love them, or feel it would look nice in the house? First assignment - get frugal, and stop spending on anything but necessities.

Second - check out your credit card interest rates, and all of the other interest rates; mortgage, vehicle payment and anything else you pay on time. It’s time to negotiate with your creditors. In this economy, many, many offers are out there that will help you lower interest rates on just about everything. Your mortgage is your highest debt - start there. Talk to your lender and find out if you qualify for a ‘loan modification’ on your loan.

I lowered my interest rate last year from 6.25 percent, all the way down to 2.5 percent. That changed the payment by $400.00 per month! Believe me, with over 1,000,000.00 foreclosures in 2010, and another million expected in 2011, banks and lenders are more than willing to work with you. The government even initiated a plan for homeowners, called “Making Home Affordable” plan. If your in debt and cannot afford your mortgage at its current rate, your lender is obligated to work with you to lower your payment.

Third - check out your credit card interest rates. Credit card companies are well aware of the financial crunch we are in, and are facing. There are literally hundreds of credit card companies that are offering low interest, and some, zero interest for the first 6 months. Transfer your balances regularly to the new credit cards that offer low or no interest. That could save you literally hundreds in monthly payments, and allow you to lower those balances a whole lot quicker.

Fourth - auto loans are some of the highest interest loans out there. There are many companies out there willing to lower your interest rate on these loans. They call it ‘auto refinancing’ and it can save you a bundle. Sure, the paperwork is tedious, and a bit of a pain, however, once it’s done and your payments are lowered by hundreds of dollars a month, think of the freedom you will experience at having all of this debt, more manageable.

Fifth - and most important - STOP SPENDING! Seriously, we are in an economic crisis! When you reign in the spending, all of a sudden you start to feel better about your debt and yourself. Debt starts going down, instead of increasing. If you see something that you feel you need, wait for it to go on sale - or find something cheaper.

We are all programmed to think that we deserve to have the nicer things in life, but look at were that got us! Americans are in such financial debt that most of us don’t even have the suggested 6 months of savings stored away for a rainy day. We need to realize how difficult it could be should we lose a job, or worse, become sick or unable to work.

Also Consider Groceries and Clothing!

Buying groceries should be a coupon-clipping event. I don’t use coupons myself because I always end up buying what is on the coupon, whether I needed or not. However, when I shop, I only buy the things that are on sale. Most grocery stores put specific items on sale every week, and it switches from week to week. If it isn’t on sale today, it will be next week. When the products you use go on sale, buy two of them. The specific items I buy, when they go on sale, I stock my pantry with them. These sales actually save tons of cash every month.

Food items that are bought in bulk save you big time. Since I’m vegetarian, my staples are beans and rice, used for black bean tacos’, bean and rice burritos and so many other things, and buying dried in bulk can last a year, and cost you pennies per meal. The same with brown rice - big bulk items such as this can cost pennies in comparison with the smaller packaged items. Stocking up on canned foods that are on sale is a great way to save too.

Clothing is another big expense, and I’ve found shopping at Goodwill, or eBay cuts the clothing costs dramatically. Buying winter clothing can be very expensive - the winter boots, jackets, hats and gloves, and if you have kids, the winter pants for snow play. These items can all be purchased at 1/3 of the cost on eBay or another bargain place. I have found some of my favorite items at Goodwill. Depending on the area, you can buy name/designer brand items, for under 10 dollars. Things that are almost brand new and the buyer’s remorse is non-existent.

Be conscious of your spending - keeping a ledger, or a budget will keep you on track, and don’t sway from it. Of course, the occasional splurge is warranted, and usually much deserved, but keeping your mind focused on paying off debt and not spending money on anything not needed - will be so gratifying when your goals are reached.

Ally Tobias is part of the team at Hive Empire that manages Home Loan Finder, a free home equity loan and variable rate home loans comparison service in Australia. Before joining HLF, she was a Media Planner with McCann Worldgroup Philippines, Inc., with award-winning executions, including the Levi’s 501 “Live Unbuttoned” global campaign.

Photo By xJasonRogersx