Cut the Fat Out of Your Budget
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When you want to shed pounds, you put yourself on a diet. When you need to cut down on excess expenses, you must go on a financial diet.
The key to making your money go further is to trim the “fat” out of your budget. Using free grocery coupons is an easy way to save money each month. Unless we are willing to significantly change our spending habits, there will be no reduction in the average $7,000 of debt carried by American households.
The first step is to prioritize your expenses and determine which of them are essential. You should budget for necessities such as food, house or apartment payments, utility charges, as well as credit card payments. If you can, pay extra on the highest interest rate credit card, and if you are able to pay just the minimum on the lower interest rate cards, then do that as well.
Now you need to determine where the “fat” is, in your budget. If paying off what you owe each month is not possible, then you should consider as “fat” anything that is not a necessity. Low-mileage SUVs, recreational Vehicles, and boats are all unnecessary “fat”. Search out expenses to cut out or reduce anywhere you can.
If your money is being spent on video game consoles and online games, then it’s best to unplug the machines and spend time in the real world. If you typically spend a lot of money at a fancy salon, then go to a less expensive hairdresser until you pay off your expenses.
When dieting, you substitute unhealthy foods like fried chicken for healthier alternatives like grilled chicken. While you are on a money diet you need to seek out other cheaper choices to replace life’s luxuries. Buy store brand groceries instead of the name brand; look for designer clothing at consignment stores where they will cost a lot less. And do the majority of your clothes actually need to be dry cleaned?
Reduce your expensive gourmet coffee habit. Purchase generic products at the supermarket. Try going to a matinee, which is less expensive then going to the movies at peak times. In addition, rethink whether cable TV and pay-per-view are necessities. Visit museums when they offer free hours.
Replacing your old, dysfunctional spending habits with healthier ones will take practice. Once you develop healthy spending habits, they will probably stick with you for a long time after your debt problems have been resolved.
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