Tonight I read an article
magazine on tips to get out of debt
. Some are cookie-cutter lines from personal finance books, while some have practical values (whether you do it or not is another day's discussion):
* Pay it Down
: Work overtime, take on a second job and devote that income to paying down debt. Cash in CDs, home equity loans, loans against retirement.
* Cut Spending
: Cook at home more often, brown bag it at work and be creative about gifts. If you have the biggest cable package offered, cut back to a lesser plan. Same for cell phones, Internet.
* Track Your Expenses
: This is the only way to have a true picture of where your money goes. Once you see where you are, it might be helpful to have a family meeting to decide how you want to spend your hard-earned dollars. A joint effort yields a greater result, so let the kids in on things. Reviewing how you spend your money allows you to set priorities and results in a freedom, putting you in charge.
* Pay Cash
: This results in a significant savings, both in terms of what you purchase, but also in not paying interest on your purchases. When you're out of money, you simply stop buying!
* Around the House
: Adjust the thermostat by only two degrees. Experts say you can reduce your heating and cooling bills by 5 to 10 percent by simply moving the thermostat two degrees. Also empty your carís trunk & fill the tires. The heavier your vehicle, the harder the engine has to work to push it around town. Correct air pressure in your tires will improve your gas mileage by about 10 percent.
* Check Your Withholdings
: Speak to your human resources department at work and confirm that you have the proper number of withholding allowances on your W4. If you routinely get a federal tax refund, you're shorting yourself each month. The average refund for 2005 was well over $2,000.
* Have an Insurance Check-Up
: You don't want to be over- or under-insured, but if you haven't compared rates in a while, it's time to do so. Also, inquire about discounts for good driving, security systems, or putting all of your insurance with one carrier.
* Don't Impulse Shop
: If you see something you want, don't buy it on the spot. Later, if you still want it and you're sure you can afford it, then go ahead.
* Have a Garage Sale
: If you are paying for a storage building, go through those items and get rid of what you can. Then, do the same at home. You'll make money off of the items you don't use anyway, and you'll save the cost of storage.
* Power Pay Your Creditors
: Some people find that paying off small bills one at a time gives them a sense of accomplishment. When one bill is paid in full, take the amount you were paying to that creditor and start paying the next largest bill. Keep working your way up the ladder of bills. When you get to the largest bills, you've built up a significant payment and can likely knock off that large debt quickly. Meanwhile, be sure to keep paying at least the minimum on everything.