Alyice Edrich - "Life doesn't make it easy to be debt-free, but we're doing what we can to make it happen." ** Tips are for entertainment purposes only... Please seek financial/legal advice from a licensed professional. **
Alyice Edrich - Debt Free Tips - Give yourself a little peace of mind. Before you start any savings account or create a debt-repayment plan, tally up how much it would cost you to survive in your current living condition for one month, based on the bare minimums (rent, utilities, food, insurance, minimum credit card payments, etc.). Once you figure out how much you'll need to survive on if you lost your job or were injured on the job, work extra hard to get that money into a savings account.
Alyice Edrich - Debt Free Tips - When your budget is tight, and you're in the middle of a debt snowball, taking an unexpected windfall of cash and blowing it seems more fun and rewarding. But don't do it. Take that unexpected cash (work bonuses, raises, tax refunds, inheritances, etc ) and put it towards your debt... Every little bit helps get you out of debt faster and the sooner you get your debt paid down, the more "free cash" you'll have for other things.
Alyice Edrich - Debt Free Tips - It's hard to pay down a credit card that has 19% or higher interest. Look into getting a personal loan with a lower fixed rate. If you can't get a personal loan, opt for transferring your high interest credit card to a lower interest credit card. Just make sure you read the fine print, checking for new loan fees, hidden fees, late fees, minimum payment due, interest rate jumps, etc! #DebtFree
Alyice Edrich - Debt Free Tips - Getting into debt is easy and it happens quickly. Getting out of debt, however, is HARD! And it won't happen overnight. No matter how strict you are with your budget, how much you sacrifice, or how many extra hours you work... getting out of debt is going to take time. It can take a year or it can take several years... the important thing to remember is that you need to give it the time it needs without stressing out. #DebtFree
Alyice Edrich - Debt Free Tips - Put a little money aside every month to cover irregular bills (once a year or every six months), unexpected expenses (a forgotten birthday, a promotional dinner, a flat tire), small emergencies (water heater dies), and large emergencies (a job lay off)... that way, you won't have to turn to your credit cards or loans to bail you out. #DebtFree
Alyice Edrich - Debt Free Tips - Deny yourself access to your savings accounts. It was hard for us to save money until we denied ourselves access. Now, none of our savings accounts can be accessed via ATM. We even keep our "dire emergency fund" in a separate bank account so we can't easily transfer money when we're short funds. This method of saving, combined with automatic transfers, has saved us many times… unexpected root canals, $1400 van repairs, job losses, and so forth. #DebtFree
Alyice Edrich - Debt Free Tips - During the holiday season, stressful times, and hardships, emotions can get the best of us… causing our spending habits can get out of control. I once racked up a $5000 credit card bill because I didn't keep my emotions in check… When your emotions are out of whack, give yourself 30 days before you BUY. If you must window shop, put things in your wish list and clip ads. But DO NOT buy for 30 days. By then you'll know if you really wanted or needed that item.
Alyice Edrich - Debt Free Tips - Every January, we do a little downsizing and selling off some of our "old stuff"… then we rethink our "spending" habits and take a look at our budget. This year, we're starting a "spending fast". Instead of being so strict that we can't buy anything but our "needs" we've opted to give ourselves a small allowance to buy our "wants". If we can't afford our wants, then we'll have to save our allowance or not get it. #DebtFree
Alyice Edrich - Aside from evaluating everything in terms of wants versus needs, you also need to change your thinking in terms of the actual costs associated with what you're buying. Stop thinking in terms of "Can I afford that monthly payment?" or "Oh, that'll just cost me $20 a month!" And start thinking in terms of "How many hours of my life must I work to pay this off?" or "What is the total cost after taxes, interest, and other fees? And how long will I have to work to pay that off?"
Alyice Edrich - Debt Free Tips - When you get about halfway (or even a third of the way) through your debt repayment plan, you're going to start feeling tired of all the sacrificing. This is a good time to give yourself a mental pep talk and create a fun, new goal to work towards! Even if you only put $10 a paycheck away, start an entertainment savings account. An account that can be used, without guilt, for a luxurious night out, a high priced concert ticket, or a weekend get-a-away.