If you want to reduce the debt that you are dealing with in your life, there are various ways that you can do this task. Here’s how you can reduce debt by going “cash only”. This is just one of a number of debt elimination secrets you can use to get on top of your finances, eliminate all your debts and wipe your financial slate clean.
Secret#1: Going “Cash Only”
One way that you can drastically reduce debt that you have is by using cash to pay for your purchases. You are in debt because of credit you got so it makes sense to eliminate further use of credit to get you out of trouble. While it can be challenging to get on top of debt, the first thing to consider is changing the habits that resulted in you getting into debt in the first place. It will be worth the effort in the long run. Here’s how you can reduce debt by going “cash only”.
Cold, Hard-Cash
Using cash to pay is an excellent habit to develop to get on top of your debts. The average U.S. household spends $1.22 for every $1.00 it earns. If you continue to use credit (credit cards, personal loans etc.) all the time, you will build up more and more debt. As the debt piles up, you can begin to lose control, fall behind on your monthly payments and this ultimately creates massive financial stress and strain. Instead of reaching for your credit card the next time you want to make a purchase, stop for a second and think about paying for it in cold, hard cash. This way you start buying only what you can afford with the cash you have. (Read More)
Set a Monthly Budget
The basic principle is that you set a monthly expenditure budget and withdraw the cash amount required for your purchases. For example, if your net monthly income is $2,000 I first recommend you automatically save 10% of this amount i.e. $200. You might think you can’t save 10% but I bet you can. If 10% is a stretch at first, save 5% for the first few months and step up to 10%. Now, supposing your essential expenses e.g. mortgage, rent, insurance, utilities, food and clothing etc. comes to $1,000 per month, that leaves you with $800 left for disposable income or what I call “stuff” (eating out, movies, entertainment etc). I call it stuff because its stuff you don’t need but you want. (Read More)
Making Small Sacrifices
Anyway, I recommend you withdraw $200 in cash at the start of every week from your bank account and force yourself to live within this budget, paying for everything in cash.
If you start using cash only, I guarantee you’ll find it much more difficult to part with cold hard cash than whip out a credit card! Now, this will mean making do with less but you will quickly adapt to living within your ACTUAL financial means. Making small sacrifices in unnecessary expenditure will get you back on the road to disciplined money management and help avoid financial peril. (Read More)
Utilizing simple yet powerful debt elimination techniques like going “cash only” can really help you eliminate debt and put you on the road to real wealth creation. Discover numerous ways to eliminate debt and get on top of your finances.
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