Paying off Bills Tips

There are many solutions to the problem of indebtedness, but the most permanent solution is a lifestyle change: Make a permanent commitment to live within your means. As the famous depression-era quote put it: “Use it up, wear it out; make it do or do without.” What follows are seven points that will guide you on the path to pay off credit card debt and living within your means.

1. Make and keep a budget. A budget is the primary tool for controlling your finances. List income first and then add basic needs: Shelter, food, clothing, transportation and basic communications. Carefully examine every item in order to minimize costs while maintaining the necessities. Be willing to downsize. The next item is savings, and only after that comes paying off bills.

2. Do not spend money without a good reason: If a payment is not necessary for basic requirements of life, examine it with suspicion. Always ask, “Do I really need this?”

3. Find a way to increase income: Resolve to earn more money or find a second job. The key is to maximize income for time spent. Use additional income for savings and paying off bills until all debts are paid. Afterward, use the additional money for savings and investment.

4. Avoid using credit cards: If funds are not available, do not use a credit card unless the expense is a real emergency.

5. Reduce or eliminate debt: Find ways to consolidate or refinance large debts in order to lower interest rates. Pay off the high-interest and smallest debts first, and as each debt is eliminated, shift that payment to another debt. Resolve to become free from debt.

6. Save money: Commit to the discipline of saving money with the goal of maintaining a minimum of six months living expenses in liquid savings at all times.

Choose productive hobbies: An online gaming subscription costs money, but gardening is a healthy outdoor activity that produces food. Books from the library cost nothing, while video entertainment typically requires cable or satellite bills.