Student loans, credit cards, mortgages, all these things add up to one word…Debt! If left unchecked debt can spiral out of control, leaving your finances in a hopeless wreck. It’s not too late. There are things you can do today to handle the debt you have and keep new debt from creeping up and taking over your life. This article will give you ways to increase income and decrease expenses. Both are important things to do if you want to learn how to tame your household debt.
Part of taming debt means to increase the money you have coming in so you can pay off your bills. Here are a few ways you can bring in more money.
- Get a second job.
- Run a garage sell.
- Sell things on eBay.
- Sell a property you own.
- Turn a hobby into cash. If you regularly make things for recreation, consider selling some of these items and using the proceeds towards paying down your debt.
Set up a contingency fund
Many experts call this an emergency fund, but I like to think positively and call it a contingency fund because if you call it an emergency fund, an emergency will happen. If you call your fund a contingency fund, you will still be prepared. Ideally you want to have enough for three to six months worth of expenses saved in this account. Of course the more you can put in this account the better off you will be. Three to six months is just a starting point. To be clear this is not for a vacation or a day at the spa. This is for those things like a flat tire or a leaky roof.
The other part of taming your household debt is cutting expenses. It does you no good to save money for a rainy day if you are going to just spend it frivolously. Here are some ways you can cut down on your expenses to free up more money to pay down your debt.
Only buy things you can afford to pay cash for
This is a biggie. I know the no money down and 0% interest signs are tempting. Don’t fall for them. You will wind up paying more if you do that than if you would have saved up the money and paid cash for the item. If you can’t afford to pay cash for whatever it is, don’t buy it. Remember that you are trying to tame your household debt. A little sacrifice here and there will make a big difference in the long run.
Learn to say no to your kids
I know it is hard to resist those puppy dog eyes. Sometimes it is tough to hold your ground when your kid is throwing a temper tantrum in the middle of the store. However, if you don’t have the money for whatever it is your kid is asking for, you have to learn to say no. It may feel awkward at first, but your wallet will thank you for having a backbone.
Getting your financial house in order is a big task. However if you take small steps you will be on the right path in no time. Use the tips given in this article to tame your household debt.