How to spend more and avoid debts?
Thursday, October 22, 2015, 6:00 PM | Leave Comment
If you read debt management books or watch debt shows on television you will hear a lot about saving and not spending. But what type of life is that? Isn’t there a way that you can spend more but still keep out of debt?
Yes, there is. But you must be careful.
Following are six ways that you can spend more and rack up less debt.
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Create a Budget
Creating a budget – and sticking to it – is the single most important part of staying out of debt.
The mistake that most people make when creating a budget is not being thorough enough.
You need to include EVERY expense on your budget, even things like gasoline or bus fare, getting your hair cut every two months, your annual membership to the local zoo or beer of the month club – everything!
You also need to budget money for entertainment (everyone needs the occasional dinner out, movie, and such), clothing and gifts (be frugal yet realistic) and so forth.
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Save even when Buying
This may sound like an oxymoron, but it is not. As Benjamin Franklin once said, “A penny saved is a penny earned”. This means that waiting for that new television to go on sale is a smart move.
Use coupons. Look for sales. Join clubs that earn you points, rewards and cash back. Figure out which store has the best price on your regular purchases, such as milk, eggs and coffee. Make money by saving money.
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Use Cash instead of Credit
When you use credit it costs you money in interest, maybe monthly or annuals fees, and you want to avoid this.
But, using credit also gives people a tendency to spend more; it is too easy to overspend when you are not handing over cold, hard cash.
The best method is to set yourself an allowance for groceries, entertainment, and such, and take this money out of the bank in cash.
Put it in envelopes for each type of payment: an envelope for grocery money, one for entertainment, etc. Then, only pay for payments out of the correct envelope, in cash.
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Sell My Structured Settlements
If you are receiving structured settlement payments from an old lawsuit you may decide to sell some or all of your payments and use that money to pay down any current debt or make a large purchase.
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Buy a Certified Used Car
A new car depreciates as soon as it pulls out of the lot. Your best value is to buy a used car that has been thoroughly checked out and certified to be in good repair.
You may want to consider buying a warranty if it is difficult for you to come up with repair money on the spot, but be sure to read the fine-print; many warranties have so many exclusions that they have little value.
Remember that a demo car from a dealership can be a good value also.
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Sell Unwanted Belongings
One way to give yourself more money to spend is to sell things that you no longer use or need. This can net you money while also helping you to declutter and make your life seem lighter.
With a bit of planning and will power, you can have your cake and eat it too. It is possible to live a “good life”, where you have the things you need, enjoy life, and plan for the future. We all hear that things do not buy happiness, and it’s true.
But life is more fun when you can enjoy the occasional purchase and treat yourself once in a while. It’s okay, just be cautious, don’t overdo it, and remember that there is a peace and happiness that comes with being debt free also.
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