Creative Debt Solutions
First and foremost, there is no one perfect way to get out of debt. Every person’s situation is different and needs to be approached with an honest and creative perspective. It is important to review your money coming in, money going out and then get serious about increasing the one and decreasing the other. Here are some strategies to get you started.
Use the cash only approach. One method of paying down debt is to use cash only when paying bills and expenses. If you are trying to get rid of existing debt, you should have a spending freeze on all credit cards. By using only cash, you are limiting yourself to only spending money you have. You are also making sure that you are not getting yourself into further debt by making sure your credit cards stay at home.
- Get a Side Gig
- Have a Roommate
- Cook All Your Meals at Home
- Know where your money is going
- Get Help From an Attorney
Side gigs can bring in much-needed income with minimal inconvenience to you. Think about your previous work experience and strengths and then try to match them to possible side gig work. If you are a talented musician consider giving music lessons or playing at local venues on the weekends. If you are a teacher, look for tutoring jobs in the evenings and on the weekends. If you have previous experience in a restaurant, perhaps you can pick up an occasional shift to make a little extra income. There are also now jobs that are specifically designed for people who want to work from home such as customer service and data entry positions. If you have a working vehicle, adequate insurance, and a clean driving record ride-sharing companies give you the opportunity to make some money on your own schedule. Also, if you are investing more time in a side gig, you will have less time to spend money unnecessarily. If you decide to take on a side gig keep in mind that you will have to give up some of your time and energy in order to make it work. You will need to treat your side gig with the same courtesy and professionalism you apply to your day job.
In addition to taking on a side gig to make more money, you can also take serious steps to cut your monthly expenses. This savings becomes money you can in turn use to pay down debt. One of the biggest expenses you probably have every month is your mortgage or rent payment. Housing is a large expense and can be offset by sharing the burden with a roommate. Living with someone can be a challenge and should be done cautiously. If you are considering a roommate make sure you properly vet the person. Living with another person can be inconvenient, but this may allow you to cut your housing expense in half. If your monthly rent is $800 and you split the cost of rent with a roommate, you stand to save $4,800 a year. That money can go a long way towards paying down debt and getting your finances in order.
Eating out is a fantastic treat. You can get your favorite meal cooked and delivered to you with no clean up required. But by the time you pay for your meal, a drink, maybe an appetizer or dessert and then include a tip, it is also incredibly expensive. Restaurants charge double, triple or more what the same meal would cost you to make at home. By staying in and cooking all your meals at home you can save bundle. You also get the benefit of leftovers and the fun of creating something delicious with your own two hands. If you absolutely have to eat out, set a food budget for the week and stick to it. This will allow you to go out once in awhile without feeling deprived but will prevent you from overspending.
If you aren’t already tracking your money, you need to start. A simple excel spreadsheet or budgeting software program can help you easily track your income and expenses. You can also categorize your expenses so you can see where your biggest expenditures are and start to tackle them. If you are facing large amounts of credit card debt you will need a different strategy than if you are overspending by eating out seven days a week. Regardless, you need to first know where you are spending your money so you can figure out how to start saving it.
If you are so far in debt you don’t know where to start, get help. Call McCarthy and let our experts sit down with you and review your situation. We specialize in helping people get back on their feet and on the road to financial freedom.
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