With the economic conditions that are prevalent all around, it’s no wonder that people are having a hard time with their finances. Everything from television advertisements to Internet banners seem to talk only about debt and programs that’ll help you consolidate debt. It can seem pretty unnerving to be amongst all this and yet manage your finances with a positive outlook. However, it’s for your information that you can very well consolidate debt and get your finances back on track, provided you maintain and stick to a frugal budget.
How to consolidate debt while maintaining a frugal budget
It might seem like an unachievable task to you, but fact remains that it’s very much possible to maintain a frugal budget and consolidate debt simultaneously and efficiently too. You’ve got to understand 1 basic thing before you take a plunge. Fact remains, your finances are going to behave exactly the way you handle them. Now, just like your spending habits led you into debt, similarly your frugal living ways are bound to get you out of it. So, be very careful about how exactly you treat your finances henceforth. Take a look at the following strategies and you’ll know how exactly you can consolidate debt while maintaining a frugal budget.
- Start with your income statements: The very first thing you should do is start with checking your income statements. You need to run a check and be absolutely sure about how much exactly you’re earning, not just on a monthly basis, but also on a weekly basis. The closer you analyze your income, the easier it’ll be for you to channelize it towards the right avenues.
- Go on to your expenses: The next thing you’re required to calculate are your monthly expenses, again on a monthly as well as weekly basis. This is one task that you must carry out with all the efficiency possible for you shouldn’t leave out any aspect of your life where you’re spending something. You can begin by calculating your present household expenses for determining the recurring monthly costs. You mustn’t forget to include your mortgage or rent, or even utilities and loan payments for that matter. Then there are food costs and so many other expenses that’ll come under this.
- Take a close and hard look: Now, once you’ve got your actual income and complete expenditure in front of you, will you be able to judge which are the avenues in which you can manage to cut costs. You should make a conscious effort to cut costs for all those things that aren’t absolutely essential. Frugal living calls for some very strict measures and you must make sure that you don’t spend anything other than what’s absolutely necessary. This is important for otherwise you wouldn’t really be able to dedicate the right amount towards you debt payments when you consolidate debt.
- Try and eat at home: When it comes to cost cutting, frugal living and most importantly making debt payments, then there immediately arises the concern of cutting down on food costs. Even before you realize, you’ll have spent far more on your food than you’d have thought possible. For this very reason it’s important that you try and eat homemade food as much as possible. Carry your own food to office in a lunch packet and see what kind of money you actually manage to save at the end of the month.
- Scrutinize your entertainment expenditure: It’s not possible that you live without any entertainment whatsoever. However, what’s important at the moment is the fact that you scrutinize your entertainment budget very carefully. This is essentially because the more you can cut down your expenses in this sector; the easier it’ll be for you to make payments for debt consolidation. Frugal living means you’ve got to make sure that you go out less and save that money in turn.
- Try and be innovative: Living frugal and consolidating doesn’t necessarily mean you’ve got to cut down on all pleasures of life as long as you try and let a bit of innovation occupy your mind. Instead of going out to the theater, you can always arrange for a movie in your cozy den with homemade popcorn and sandwiches. The fun quotient remains the same while you effectively save money as well.
The 6 strategies discussed above should effectively guide you through the ide
a of frugal living while consolidating debt. So, don’t waste time. Rather go and get it done.
About the Author:
Myrina Stein is an contributory writer for Oak View Law Group. She is also a financial adviser and guest author for acclaimed blogs. Michelle has been writing for more than five years and helping people to get wise with their money. Her interests include attending financial seminars, writing columns related to debt settlement, bankruptcy and visiting personal finance blogs.