“Spending Diet or Spending Fast”- Either way a new concept to cut down your debt fast!

“Spending Diet or Spending Fast”- Either way a new concept to cut down your debt fast!

This is fairly a new concept applied by Anna Newells, a Denver-based blogger who paid off $23,605.10 of her student-loan and credit-card debt through this process within a couple of months. Sounds relatively unreal, but it can be achievable as long as you can differentiate your needs vs. wants.

Source

A real life experience of Anna Newells.
According to her,

“With the spending fast, I had no discretionary income."  This meant she would spend the money only on essential needs such as rent or mortgage payment, utility bills, groceries, transportation or vehicle costs.  If it was not absolutely necessary -- then she did not get it!   Clothes, coffees, dining out, movies -- forget it!  She did not get it!  Nothing!  Nada!

 With the spending diet, however, she gave herself a $100 non-need allowance per month, and would spend that on whatever she wanted. BUT the spending diet was way harder than the spending fast, she claimed. “Because with the spending diet, I would try to spend normally -- and then I would overspend!”

How can you apply these programs?

Let me give you an example. Your daily coffee from that high-end cafe is not an essential purchase. Seriously, ask yourself, do you really need to spend $5 to wake up every morning?  Instead, try making yourself a cup of green tea or black coffee or anything that suits your taste.

Always remember that your spending needs should only include necessary or must expenditures such as rent or mortgage payments, transport costs, groceries and emergencies. Always make sure you ask yourself, “Is this absolutely essential?” If it’s not, than you cannot spend money on it!  This takes discipline. Lots of it. Without discipline, you will never last in this program.  But if you do, the rewards -- paying off your debts - are huge!

Anna Newells’ tactics may sound too harsh for most us.  So here is one alternative version of spending diet program.

Give yourself a budget cap combining all of your essentials and non-essentials. This could be your monthly or weekly allowance depending on your pay day structure. You must survive within the budget that you give yourself every time. It is wise to start with the usual amount that you spend every week or month and then start to cut down a little portion from that budget as you progress.

For more money saving tips and financial advice visit www.prudentfinancial.net

Where to save money and start paying off your debts first?

When repaying your debt, first start with your credit cards and say no to minimum monthly payments. Then follow up with your car loans, personal loans and other kinds of debt.

Also, don’t forget to reward yourself after achieving your monthly financial goal, but remember the reward level must stay within your spending limit!

Overdue debts can lead to bad credit rating which will result having poor credit score, minimizing your debt will not only improve your financial condition but also your personal and family life.

LOTS OF LUCK!

Let us know if these methods can be helpful to manage your finance better. Are they practical? Are they durable?

 

 

 

Not Letting Your Money Control You

We are living in a difficult economic situation and we are all affected by it but we can all create a better situation for ourselves. There are a lot of people out there that let their salary dictate their spending habits and not their financial position.

Many people who don’t earn so much have a solid financial position and then there are those who have huge salaries and are on the road to bankruptcy. This is because they spend even more and allow money to control them. They are in a world of financial status and usually don’t feel good about themselves so they allow the money to control them rather than improving their financial situation.

If you are happy then you don’t need to impress others with a false display of wealth or status. We need to be happy within ourselves and not care about what others think. When we take control of our money, we become more secure, financially and emotionally.

We all from time to time need to splurge. You don’t want to stop yourself from getting things that you need or love because this is allowing money to control you. It’s about being frugal. Frugal means avoiding waste. It’s not about being cheap and stopping yourself from buying what you want until you absolutely have to and then you buy the cheapest item with no regard to quality. It’s better to buy a better quality item one time at $1000 than to buy a cheaper item at half the cost but need to replace it more often.

Take a minute to review your bank statements. Is it showing good spending habits? You need to know how much money is coming in and how much is going out. Set aside some time to work out a budget, you’ll be thankful in the long run.

You want to create a life of happiness and worth. Everyone deserves to have what they want. Everyone deserves to have what they are worth. You worth is decided by you and you only. Only you can guide yourself in creating the life you deserve and not be dictated by money.

Have you ever heard the saying “You need money to make money” and you think how can I make money if I don’t have any? Well the wealthy achieve success by having money work for them rather than working for money.

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What to do when you don’t have enough?

It’s a vicious cycle. We can never have enough money to satisfy our needs. The more we have, the more we spend so you should ask yourself, do you spend too much money or is it that you don’t have enough money?

What to do when you spend too much

When you have money but feel like you don’t have enough, you should consider cutting back. Do you really need the newest model cell phone available today? Stop impulse shopping. Cut back on any luxuries that you never use such as extra cable channels or eating out at the trendiest restaurant. What you want to do is cut out the things in your life that you can do without.

When you just don’t have enough

You may have lost your job or are working hard but just don’t make enough. This is the time where it’s crucial to make changes in your life. This is sink or swim time. You need to get yourself motivated and be aware that there are no limits except the limits you put on yourself.

You should start by reducing expenses. There are always ways to reduce expense. You may need to get a roommate or downsize your home. You may need to start taking the bus or carpooling. Cut back on your food budget. Cut down on electricity in your home. You definitely want to stop using any credit cards you may have. If you’re a smoker, take this as an opportunity to quit and become a healthier you.

Contact your creditors and see if you can work out a reduced payment plan of some sort. If you can prove economic hardship, you may find that some companies will reduce interest rates or extend a payment plan that’s suitable to your situation.

If you’re able to pick up extra hours doing side work such as babysitting, yard work, selling on ebay or tutoring for extra money then go for it. There are so many money making opportunities out there, all you need to do is expand your mind.

When you have the tools to save money whether you are employed or unemployed, it will always be a positive outcome.

For more valuable information, visit http://www.prudentcreditrepair.ca/