This week we will discuss managing your finances when you are struggling with debt. If you’re experiencing financial pressure, the following are ways you can budget to help pay off debt:
- Reduce food expenditures: While going out to eat for lunch every day may seem like a good idea at the time, it can come back to haunt you when you pay bills. Bringing in a sack lunch to work is a cheaper and healthier option. This also means cooking more dinners at home.
- Reduce utility expenditures: Try to waste less money on electricity and water. Take shorter showers, and don’t leave the faucet running when you’re brushing your teeth. You can save money on electricity by keeping your thermostat at a comfortable temperature depending on the season, and by taking advantage of days when it’s comfortable enough outside to turn off the air conditioner or heater and opening the windows.
- Grocery shopping done smart: Make sure you’re buying food that is perishable. Avoid shopping when you’re hungry—people who shop hungry often buy unnecessarily bad foods that are not sustainable for meals over extended periods of time. They also end up spending more money on groceries, because they typically buy more. Make sure you write down what you need before you go shopping.
- Pay in cash: It’s easy to rack up credit card debt when you don’t feel the effect of purchases until the following month. If you use a debit card or pay in cash, you’re only going to spend the money you have allotted for your purchases.
These are just a few tips for budgeting. If you’re struggling to pay off debt, know that there are options in bankruptcy. You can file a Chapter 7 or Chapter 13 bankruptcy and eliminate unsecured debts like medical bills and credit card payments. In our next blog, we will look at ways to reduce and eliminate credit card debt.