If you are extremely serious about getting out of debt, your debt reduction plan should include some extreme budget cuts. You have to maximize your funds available to throw at the debt problem. This, of course is not for everyone, but if you find that you are sending extra money each month to help pay down your debt and the interest is still overpowering you, something must be done.
A lot of people want to reduce debt. They want to get out of the hole that they put themselves in through student loans, over-extending, not realizing how far they were down, or just plain mismanagement, but they continue to live as if they have no debt.
Maybe you know the type, or you are the type but do not see the issues. These are the people who are sending in extra money on their highest interest debt, wishing they could send even more, while at the same time, they light another cigarette. Or maybe they are sitting at their desk wondering what they could do to save more money without noticing that all of the lights are on in the house.
I was talking to a man who has been struggling with his debt for three years now, and he admitted that I was right, but said that he did not think that a smaller electric bill would help. He thought that an extra few dollars each month would not really make that much of a difference. He did not smoke and drank rarely so could not eliminate those vices, but he was interested in my suggestions that he was not getting extreme enough with his search for ways to lower his spending.
Taking another look at his monthly budget, I saw that his natural gas bill was higher than mine even though he has an electric stove, and the weather is nice. Determining the cause of this higher than average bill ended up saving him on multiple bills.
See he likes to take long, hot showers in the morning to start his day, and another when he gets home from work because he has a job where he gets his hands dirty. So eliminating that morning shower and shortening the afternoon routine will save him on his gas bill, his water bill, and since he has city sewage and pays by the gallon, that bill as well. Now that he wakes up later since he does not need that much time to get ready, he is saving the electricity needed to light up his house before the sun comes up, too.
After getting him to see the light, so to speak, he came up with a few simple fixes of his own. He could walk to the park on the weekends to see his Nephews play baseball, and could take a sports bottle of water from home instead of buying 2 small bottles at the game.
This sparked him to look for other small changes that he could make to add to his new budget surpluses. He decided that he would go to sleep half an hour earlier at night, this meant thirty minutes less use of his television, the lights in the living room, and also the unexpected bonus of no longer craving the milk and cookies he had as a midnight snack. He made a few small changes and says that he is still working on his debt, but he feels better knowing that he is trying harder and also has the added benefit of a more frugal lifestyle that he hopes to maintain after his debt is paid off. He is still not sure how to react when I tell him that there are more extreme measures that he can try, but I will talk to him about that another time.
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