Little Things Add Up Big Time When It Comes to Paying Down Debt
While I'll mourn the sunny weather and homegrown tomatoes, there's one thing I won't miss about summer - high gas prices.
You know it's officially fall when the pinch at the pump hurts a little less. Yesterday it was announced that an average gallon of gas had fallen below $2.50, the first time it's been that low in two months, according to the Associated Press. That's down from approximately $2.70 in July - and actually about a dollar less than last year.
Of course, I realize that saving a few bucks every time we fill up isn't going solve all our money problems. But it's a start. Imagine that you could save $20 a month on gas. Better yet, try carpooling or taking public transportation some days and save even more. Now combine that with a few other budget tweaks. Maybe you could cut out your gym membership, use the library instead of a DVD rental service, trade your land line for your cell phone, stop making impulse buys at the grocery store or vending machine or pack your own lunch instead of eating out. While you're at it, this is the perfect time to kick bad habits like smoking.
These are just a few ideas. Once you get in the habit of looking for little ways to save, I bet you'll be surprised at how many more opportunities you'll notice.
To make the most impact with your newfound cash cushion, put it towards your debt. Yes, I'm aware that you're probably struggling as it is to make the mortgage and buy the groceries. But paying down debt is a way to get the most bang for your buck.
Since most of us make just the minimum payment on credit card debt - usually about 2 to 3 percent of our balance - we typically barely cover interest each month. That means we're paying a big chunk of our paycheck for essentially nothing, as the principal - the original amount charged for purchases - stays mostly untouched. But by increasing monthly payments beyond the minimum, we can significantly lower our payoff time. Less principal means less interest. And that means more cash that you can keep each month for those other important bills - like the mortgage, electricity, and health insurance, just to name a few.
Want more ideas for coming up with extra cash? Consider signing up for a DebtStoppers free community workshop in Atlanta. You'll be able to talk with financial experts, be given the chance to win a Dell laptop and learn how some seemingly small changes can result in an extra $10,000 annually. But if you've already cut out every extravagance and you're still struggling to make ends meet, don't despair - help is available. A bankruptcy plan is a realistic and affordable way to reduce your debt payments and free up cash. To find out if bankruptcy could be your ticket to financial freedom, sign up for a free personal debt analysis with one of our Atlanta bankruptcy lawyers online - or at a community workshop. Find your fresh financial start this fall - bankruptcy can help.