Most families are living under credit card debt. With the cost of living rising and a shaky economy, it is hard for the majority of families to live outside debt.
Luckily, there are proven strategies that can help an individual or a family survive under the pressure of debt.
These strategies range from reducing your food expenses to changing your mode of transportation.
Whatever the strategy may be, you must always keep an eye on overly luxurious expenses.
Below are a few tips on how to help reduce family debts and expenses.
Calculate and Compare Car Loans
Many families can’t always use their local taxi firm and need a car for all the running to and from kids activities. Finding a reliable family car at a low price is a difficult task.
Hence most people do not do their homework. There are so many car loan financing institutions, and each offers a different repayment plan. Looking at the loan figures will shed some light on option is more financially sound.
Another characteristic to consider is the type of interest rate. A floating interest rate versus a fixed interest rate. Be sure to understand the difference and the impact each will have on the amounts you will be repaying.
Cut Your Grocery Expenses By Half
An average family of four spends roughly $584 – $1,156 monthly to put food on the table. Consider options where you can save money and reduce your monthly spending.
To achieve this, you need thorough planning. Just like any money sensitive venture, you will be required to keep worksheets and trackers of your grocery expenses.
Buy items that are on special for that week. Buying in bulk is often more value for your money. You can then freeze any leftovers, covering another days dinner.
Cut Off On Obvious Monthly Expenses
Eating out is costly. Think about whether it is necessary for you to eat out as often as you do. Cooking at home is often far more economical, not to mention nutritious.
Cutting out obvious monthly expenses will mean sticking to your budget and foregoing the takeout food every time the craving strikes. It might mean baking a cake at home for that birthday or anniversary instead of buying one.
Every little that you save helps to go towards paying back those debts and reducing everyday expenses.
Reduce Your Monthly Utilities Expenses
Monthly utilities are hard to pay at times. Consider ways of reducing your bill. Is it possible to adjust your thermostat setting to save on your electricity bill? Are there gadgets you can use less?
Do you have a ridiculously expensive cable TV connection? While most people cannot live without entertainment, it is wise to look for a cheaper plan. It is also wasteful to have cable and satellite TV. Choosing one will see you cut off on an otherwise unnecessary expense.
Mortgage and Transportation
These two are the biggest expenses. Consider the type of house and car you buy. Is the mortgage you are considering and the car loan going to leave your budget very tight?
I heard a story of a family who has taken out a large mortgage and got the latest model of car on finance. As a result, they would not have enough money to cover all their expenses if the price of fuel went up by a couple of cents each week.
Do not put yourself in this precarious position. Make sure there is a cushion between your monthly expenses and monthly income. If there is not, this puts an enormous amount of pressure on the whole household and can end up being its undoing.