It’s such an overwhelming state of affairs, being bound by debt. And with every piece of advice about being sensible with money that floats our way, either from websites or from our parents who statistically had much less debt than us, it makes us wonder where to turn, or what advice is the correct one?
While the task of saving money makes us feel like we need to deprive ourselves of all the good things so we can benefit, the real secret to saving money is all about cutting down on our outgoings. And here is how we do it…
Firstly, what you really need to do is to get out your monthly bank statement and get out the highlighter. You need to start establishing some spending patterns. Much like an organisation that looks at your spending habits when lending you money, you need to really start pinning down what each bit of spending is.
If you see a cash withdrawal on the same day every week, what is this for? Is it for anything in particular? If you make a habit of getting a pastry on the way to the office every Friday as a treat and it really is something you need, is it cheaper to buy frozen pastry and heat it up in the oven before leaving the house?
A pack of frozen pastries is likely to cost around the same or a bit more than the one you buy. I’m not saying to go without, but to make some sensible swaps while still enjoying yourself works wonders for your bank balance. We are all creatures of habit, so make it a cheap one. One by one, go through each expense until you have really managed to cut out the irrelevant indulgences from your bank statement.
There are times when the cycle of debt can be too much to bear, and naturally, your thoughts will turn to loans. From debt consolidation to credit rehabilitation loans, a lot of them carry different names but mean a very similar thing. A loan is a very good way to comprise a lot of your debt into one package, but only if you do your research first. It’s all about the borrowing terms, and unfortunately, so many people are consumed with getting a simple cash injection that they don’t care about the cost of the repayments, which might be more than the loan itself!
Getting a loan may be a simple way to get yourself out of debt immediately, but combine it with some honest digging into your bank statements, and it will help a lot. Once you have identified the culprits, it’s now time to start looking at the long-term problems. For example, your electricity bill, is it the cheapest you can get it, or are there many other suppliers out there that are doing a cheaper monthly bill on a fixed rate? You can find many energy comparison websites that will show you the cheapest bill for your home. Saving money is about digging deep into what you really need to spend, and what can be swapped for a cheaper option.
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