Archive for January, 2012

Simple Ways to Spend Less & Pay More on Debt

Wednesday, January 4th, 2012

Credit card debt can balloon out of control before anyone knows it. Once someone realizes how bad the situation has become it can seem almost impossible to dig out from under the red tape. Doing so will almost certainly require a change in spending habits and then applying the money saved to the monthly payments.

Ways to save

*Set goals – Decide what exactly it is that needs to be accomplished. Simply deciding to save money or pay down debt likely won’t work because that can’t be measured. Set a period of time in which a certain amount of debt should be eliminated.

*Spending – Begin by tracking every expense, from monthly bills to grocery trips, for a period of time. After a couple of weeks, go back and see if there are any areas that can be cut out, such as eating out.

*Budget – After costs have been accounted for and adjusted, create a budget using income and expenses. This will reveal whether there will be any extra money left around that can be applied to those debts.

*Start saving – Make a point to put a set amount of money into a savings account each pay period or on a monthly basis. Many employers offer an option to have money from a paycheck automatically deposited into a savings account. Using this option will remove temptation to spend the money rather than save it. An emergency fund should also be created to help fund when emergencies arise. Use it to pay for them instead of relying on a credit card.

Pay down debt

Once a little extra money can be found it should be applied to the debt payments as much as possible. There are other ways to help reduce the amount owed to credit cards.

*Lower rates – Ask the company if a lower interest rate is possible. If they agree, it can save money in the long run. If they refuse, consider looking around for an account with a lower, or even zero percent, interest rate.

*Pay the debt – If more than one account has a balance on it, pick one and focus efforts at paying it off while paying the minimum on the others. Some will pick the lowest balance while others will pick the highest one.

*Use cash – Until debt spending is under control, and even after, use cash to make purchases. Buying additional items with a credit card defeats the purpose of trying to reduce the debt. Once the debt has been eliminated, try to continue using cash to avoid falling back into the trap.

Getting out of debt can be an uphill battle but the most effective weapons can be a savings account and a budget. Armed with these, a consumer can see where they can save money and how much. Once that’s been determined at least some of those savings can be applied to paying off the debt.

This article has been contributed by Christina Lloyd, who uses these strategies to keep her spending under control. She writes for a website that has information about government college grants, such as grants for beauty students, and other types of financial assistance that is available.

Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.