Lower Gas Prices Can Be One Step Towards Debt Relief

Cooler weather isn't the only thing to celebrate about autumn. As usual, lower gas prices have arrived with the crisper air. For the first time in two months, the average price of gas dropped to below $2.50, the Associated Press has reported.

That's about 20 cents less than during the summer and 60 cents less than a year ago - and hopefully prices will continue to fall. Now, you might be wondering what the big deal is about holding onto a couple extra bucks. I realize it's not enough to pay the bills. But it's enough to get me motivated about saving.

Let's say lower gas prices save you $20 a month - and you don't even have to do anything! Now let's see where else you can scrounge up some savings. Let's say you ditch that gym membership, get rid of your land line (you probably rely mostly on your cell anyway, right?) or stop smoking. Any of these three could save you upwards of $40-50 each month (not to mention kicking a cigarette habit, if you have one, will save you health care costs in the future). And these are just a few examples.

There are many more options. For instance, you can also consider cutting out cable extras, leaving your credit card at home when you go grocery shopping to avoid impulse buys or forgoing video rentals and bookstores for the library, where entertainment is always free.

If you put your mind to it, I bet you could develop a plan to save $100 a month or more. And if you want to watch that money grow, just apply it to your credit card payments. If you're like most folks, you're probably not making much more than the minimum payments - typically about $20 for each $1,000 of debt. At that rate, you're probably barely covering interest, let alone the principal. Paying any amount over the interest is going to drastically reduce your payoff time.

I realize it's not easy to watch your hard-earned cash disappear into the hands of creditors, especially during tough times like these. But remember that the more money you put towards your debt today, the more you get back in savings tomorrow - when you reduce your principal balance, you're going to reduce the interest you owe. It's that simple.

For more ideas on freeing up some extra dough, check out one of our free community workshops in Chicago. You'll meet financial experts, be entered into a drawing for a laptop giveaway and find out how tweaking a few habits can get you a $10,000 raise. And of course, it's always free to sign up for a one-on-one debt analysis with one of our Chicago bankruptcy attorneys. If you're deep in debt but can't seem to spare another dime to put towards payments, bankruptcy can offer an effective and affordable way to reduce your obligations.

Today's lower gas prices might not seem like much, but in this economy, we've got to take advantage of all the help we can get. Bankruptcy is another way to do just that.

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