Spent a bit more over the festive season than you planned? If getting your finances sorted is one of your resolutions for 2012, former corporate worker and lifestyle blogger Keri has some tips for you.
I used to be in debt and then I became poor. Poor by choice.
I realized that I had two choices: continuing with being blissfully oblivious and ignorant about the numbers that appeared on my pay stub or face reality head on and tackle my debt. If you want to be told that it’s easy and will require little effort on your part to get on track, you came to the wrong place. If you want to be reassured that no matter what you owe, you can climb out from under it, you can. With everything in life, the biggest and most important step is to admit that you have a problem, more specifically, a spending problem. I believe that no matter what you earn, you can live comfortably but you must be dedicated, get educated and be creative.
1. Let’s Get Organized!
Take all those unopened envelopes; grab a glass of wine, a pad of paper and a new calendar. Figure out what you owe and who you owe. At this point, you need to prioritize based on overdue accounts and interest charges, working your way down to the smallest of bills. Once that list is in your hands, begin writing down when fixed bills are due and when variable bills are due. Variable expenses are those that you have a bit of control over such as credit cards, telephone, cable. Meanwhile, fixed expenses are bills that are required to be paid, rent, car payment, water, heat, etc… Knowing the difference between the two will come in handy when its time to create a budget that matches your income level.
2. Know Where You Stand.
Once you have an idea of what you owe and who you owe, I advise you to get a credit report done. Some sites such as FreeCreditReport.com will provide you with a free credit report from three (3) FREE different credit companies. Whatever your rating or number ends up being, that piece of knowledge will be used when you contact credit card companies asking for lower interest rates or to be put on the latest promotion. There are many times my credit card’s interest rate (APR) went from 9.99%-12.99% down to 0%-3.99%. Since you now know what your variable expenses are, you should begin contacting your phone/cable/internet provider(s) and ask them how they can keep your business. Aim for a bundle with the best terms and prices. I’ve seen my $75 a month cable bill change to $35 in a minute!
3. A Penny Saved is a Penny Earned.
Just because you are broke doesn’t mean you can’t have fun. Remember that expensive fu-fu coffee you used to get each morning? STOP! Save $5. Get yourself a decent coffee maker, flavor creams and make your own. If you must have that Caramel Mocha Latte, head to the store or go online, a lot of coffee companies sell the syrups and mix that go into their expensive beverages. Love movies, dining out and vacations? You don’t need to deprive yourself. Renting a movie or signing up for one of those at-home movie programs, like Netflix, will save you lots especially because you won’t be buying over-priced popcorn and fountain pop! Love dining out? No worries, you still can… but you have to plan ahead of time. Sites like Living Social, Groupon and Restaurant.com feature Daily Deals for local businesses wanting exposure and sometimes you can save as much as 80% OFF! Vacations are a much needed way to distress and they don’t have to break the bank either. Go on a “Staycation” and discover your own town or if the beach is really calling your name head over to discount travel sites like, TravelZoo.com that specialize in great vacation packages around the world or better yet, go camping!
4. Don’t Forget the Coupons on Your Way Out.
Start looking at coupons as money. The easiest expense to control is your grocery bill and for as little as three hours a week you can shave off at least 50% off of your monthly food expenditure. Put together a meal plan based on the coupons you have and keep your eyes open for sales. Many veteran “couponers” will tell you that they only buy items on sale that can be matched up with a coupon. In 2012, vow to never pay full price again!
There are many ways to save money, so let your New Years Resolution be about living more financially responsible. I guarantee that if you redefine what you consider fun in 2012, you’ll learn some priceless lessons along the way.