3 Creative Ways to Reduce Debt and Find Financial Stability

 reduce debtGuest Post by Stella Walker

There are very few things in life that are more stressful or exhausting than finding yourself in a state of financial strife. Today’s economic climate is more turbulent than it has been in many years. With this overall economic struggle, many individuals throughout the country have personal debt plaguing their finances and lives. While putting yourself into debt can be done very easily, it takes a bit more thought and effort to prevent it or to climb your way out of it. Try these three creative techniques to better manage and control your money and spending.

 

Know Your Stuff

Organization is one of the most important aspects of carefully managing your finances. If you don’t know how much money you have, how much money you make, and how much money you spend, there’s no way you can expect to keep a careful handle on your finances. The first step to financial security and freedom is understanding how much money you have and knowing how much money you make. Once you have carefully recorded how much money you make you have to look into how much spending you do.

 

For a week, keep track of how much money you and each member of your family spends and what it is spent on. If you have children, purchase a special notebook for each of them specifically for recording their money use. This will give you a clear idea of where your money is going and what your money is going towards.

 

Once you know where your hard earned cash is going you can determine what spending is excessive. Your spending notes that each member of the family takes will then become the foundation of your family or personal budget.

 

Try Envelope Budgeting

Everyone knows they have to budget in order to save money and keep on top their finances. However, oftentimes budgeting will consist of saying you’ll only spend so much on a certain portion of your expenses, but then never really sticking with it. This is where envelope budgeting comes into play. Create an envelope for each category of your budget, such as groceries, entertainment, clothing, travel, etc.

 

Put the amount of cash you have allotted yourself to spend in that category in its matching envelope. This will physically limit your spending to what you have in each envelope. Part of the difficulty with committing to a spending budget is that it is usually just a thought in your mind. By taking that budget and creating a physical translation of it, it will be more difficult for you to break your own rules.

 

Make It Easy

Try to automate as many things as possible about your finances. If you have a lot of bills and they offer an online payment options, use it. By setting it up so that bills can be automatically paid online, you will eliminate the any concern over whether or not your bills were received on time.

 

Furthermore, paying online can save you the cost of stamps. Also try to utilize the automated options your bank may offer. A good method to follow is to pay yourself first. For each paycheck you receive, try to put a portion as large or as small as you like directly into savings. This is a great way to painlessly accumulate a little savings. By utilizing the automated transfer function your bank offers, you can pay bills and save money without even really realizing it.

 

Author Bio:

Stella Walker is a freelance writer of credit score guide where she writes about topics including credit, debt, investment, bankruptcy.

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Category: Debt Freedom

  • These are great tips Stella! I really like the tip of staying organized!

  • Anonymous

    Thanks for the feedback.

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  • dnewhulk

    No matter how many tips we might read, it is very interesting that we have to have the self discipline to really pursue our goals. –credit card debt

  • dwightanthony

    Couldn’t agree with you more.  If more people spent as much time on Self improvement as self sabotage, the world would be filled with people living in true abundance.  It’s all about the journey and constant personal development.

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