How To Get Out Of Debt: Family Finances


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By : Beverly André Davis

It is Monday morning  at 7:20 am. Before my best friend could get out of her flat I rang her door bell.  Not knowing it was me she didn’t answer it because she thought it was another debt collector. Lately she no longer answers her door bell and she is scared of opening her mail.

In today’s hard economic times most of us worry constantly about debt and not having sufficient money to meet our needs.

Faced with insurmountable financial problems, having sufficient money to meet day to day expenses has become a major concern. Finding it increasingly impossible to make a budgetary choice between “wants” and “needs” we are tempted to bury our heads in the sand.

Sometimes improving  your financial situation, or simply scrimping in these straitened times and still live well is a matter of  breaking down your financial challenges to the simplest fundamentals. Applying good old fashioned discipline and common sense goes a long way in making life just this bit easier.

As you struggle to make ends meet here are a few tips which will prove helpful.

 

FOOD

To cut running cost of foodstuff work with a budget. Before going to the supermarket make a list of the things you need and stick to the list. Additionally, don’t miss out on supermarket freebies.

Making use of supermarket point values is a good way of cutting running cost on foodstuff.

Buy cheaper everyday products. Buy supermarket brands instead of fashionable brand. You might be paying a higher price for brand names instead of the quality of the goods. Most supermarket brands may be found on lower shelves. Keep in mind discount brands work just as well as their more expensive counterpart.

Visit the market to get fresh fruits, vegetables, eggs, legumes and a host of other foodstuffs which can be bought for half the value sold in supermarkets.

Legumes such as red-beans and lentils when cooked thoroughly make a delicious and excellent source of protein.

Eggs and legumes can replace meats and fish once or twice a week.

While you are at it fresh fruits such as oranges and lime sweetened slightly with honey make excellent substitutes for boxed juice, they are fresher, cheaper and contain less sugar.

While you are at it also look for discount on food.  Foodstuffs that are nearing the expiry date are often marked down.

For active children who tend to burn excessive calories quickly and need lots of carbohydrates, it may be a good idea to buy pasta and rice in bulk which is cheaper in the long run.

 

LIVE WITHIN YOUR MEANS

Take an inventory on what you spend most of your money on. Cut back on things such as:

Booze

Takeaways

Women spend a tremendous amount of money on beauty and fashion while men tend to overspend on equipment and music. Cut back may be made in these two areas.

Recently I was aghast at how much I am spending on fashion. This is an area in which I am an emotional buyer. I am swept in the moment. Convinced that a beautiful dress is a ‘must have’ I am immediately swept into a sense of urgency in which I reason with myself that if I do not grab it off the rack it will disappear. I have made a pledge to myself to buy clothing on discount and only if it is absolutely necessary.

 

OTHER AREAS

Spending can be reduced considerably in utility bills by switching off lights in rooms and hallways not in use.

We can also utilize DIY and buy only when items are on sale.

 

IN DEBT

If you are in debt you can get help finding finance deals that suit your credit profile as part of Experian credit expert membership. If you are planning or switching forms of credit, avoid making several application in a short space of time as lenders could believe that you’re in financial difficulties.

Be cognizant of your net worth. The amount of debt that you may be submerged in and the value of your assets.

 

MONEY MANAGEMENT

Budget your money wisely. How do you manage your money? You may never be able to afford everything  you might need or want. Consequently you need to spend wisely.

Before making a purchase consider carefully whether it is necessary or affordable.

Plan your purchases properly

Before going to the supermarket make a list of  the things that you really need—a list helps avoid  impulse buying.

Before making any  major purchase consider carefully whether:

  1. Something more economical can be bought instead
  2. The reason for buying that particular product
  3. Consider the right or wrong time for buying the product
  4. Lastly ask yourself the searching question “is the product really necessary?”

Budget a certain amount every month for unforeseen circumstances.

If there is something expensive that you need to buy you can put aside some money each month until you have the necessary amount.

 

PAY BILLS  PERIODICALLY

You should attempt to pay your monthly bills periodically and not allow them to accumulate until the amount becomes insurmountable.

For annual bills such as property tax and insurance put away a certain percentage in your savings each month

 

CONTROL YOUR DEBT

Go on a cash basis for virtually all consumption purchases. ‘Consumption Debt’ is one of the greatest obstacles for achieving a sound or balanced financial status. Getting into debt to buy consumption items has many disadvantages including the following: (a) the value on ‘consumption items’ depreciate with time and (b) you will be paying interest on perishable goods.

 

DON’T GET INTO DEBT BUT IF YOU MUST………..

Don’t get into debt but if you must do so wisely. If you have to borrow money do so to buy products or services on which the value does not depreciate for example a home in which the product can be sold at a later date for more than its original value.

 

FINALLY

Set financial goals. Goals help the family set its priorities. Three important  financial goals are: children’s future education, new home, retirement, pension.