Are these trying times and the interest rates driving you crazy, making you more broke than ever before. Here are ten simple tips on how to cope when the money runs out, use this action plan to wipe your financial slate clean.
- Set priorities. Draw up a few lists, each showing your weekly, monthly, quarterly and annual income and expenditure. Take your lists and consider which expenses can be reduces, or which you can eliminate altogether. Priorities your bills and expenses, if you cannot pay all of them, that is not excuse not to pay some of them at least, or pay at least something on each of them. The important question here are which to pay firs, and how much to pay, and then what to do about the others.
- Reorganize your bill payments. You can avoid the misery of hefty annual or quarterly bills by paying in more regular installments. Alternatively you can open a separate account, in to which you pay a regular lump sum each month, and then arrange with internet banking to have your bills, mortgage or rent, municipal accounts and so on paid from here every month. Divide the amount you have available for payment so that each and every account at least gets a share paid every month.
- Look out for mortgage savings. This is likely to be your biggest monthly bill, so start to shop around. You might consider moving to a fixed-rate mortgage with has the advantage of letting you know what you have to pay in advance. Make sure and try your utmost best not to fall behind on mortgage payments, you could incur huge penalties, or even lose your house from falling behind.
- Avoid living on credit. Living on credit can be dangerous. Regard your credit cards as a means of paying bills rather that a source of additional income or c ash, as the rates of interest are extremely high on credit cards. If possible, pay your credit card bills promptly, every month, a black mark on your credit reference can be both extremely difficult to get rid of and very embarrassing to live with.
- Check up on your benefits. Find out whether you are eligible for any state or private benefits. If you are unemployed, elderly or disables you may be eligible for certain benefits, or even able to receive some goods and services at a discounted rate. Every little helps and although it might be small, it can make a huge difference to you and your family.
- Beware of moneylenders / cash loans. You see them everywhere, advertisements inviting you to borrow money at high interest rates. Whatever you borrow, and from whomever, be healthily suspicious. Read the small print first, to make sure that you are not leaping into something you can not really afford, or that will make you drown even deeper in debt, just to alleviate your short-term problems. Rather talk to an independent financial advisor or your bank instead. The bank manager will probably already be aware of your difficulties and will be well disposed and equipped to help you.
- Sell something. Turn your clutter in to cash, try having a garage sale, or try to dispose of non-essential household things via a flea market or second hand stores. For your more valuable possessions, an antiques store or fair can be useful. Ask a number of stallholders and shop owners to give you their very best price, and negotiate with them. Once you have a guideline from several sources, you decide what to do with your things you want to sell.
- Be penny-wise. Try to bargain, some shops especially the larger ones, may be prepared to drop the price of their goods for ready cash rather than plastic. Then shop in supermarkets in the evening, when the prices of fresh produce and other perishables may be reduced. When buying specials, or anything that is marked down, check at the pay point that you are in fact charged the correct amount.
- Sell your skills. Use any special skills you have, like writing, word processing, upholstery or bookkeeping to earn extra money at home or even online. You can even transform your hobbies into money makers as well. Try to work for people you know, and look out for all those get rich quick schemes and the numerous work from home opportunities, most of these are all scams and you can end up losing your money instead of getting some extra. If you also have to extra rooms or space that you can live without, take in some lodgers even if it is just temporarily, the extra income should come very handy.
- Involve your family. Do not hide you money worries and troubles from your partner and your children, you might be surprises that they are valuable supporters. Children may even volunteer to take take on a newspaper round, to baby-sit or some other part-time work that suites them to help out. They might even just come up with some useful ideas as to how you can get out of the situation. And in case you have to change your lifestyle in order to get out of debt, remember that the people whose good opinion you care about, those that love you won’t think any less of you because you no longer live in that big house or drive that shiny car, they might even respect and admire you even more than before. Children might not like moving, but we are all adaptable, and so are they, and more than anything they dislike not knowing what is going on, but it all might just turn out to be one big exciting family adventure.
After everything is over, and you have worked hard to get out of debt and back on your feet again, nothing stops you from moving back into that big house, or swapping your bicycle for that four-by-four again.