Strategies for Limiting your Debt in the New Year

As the New Year begins, those feelings of hope and joy about the promise of the New Year are easily replaced by feelings of helplessness when your credit card bills arrive in the mail. Many people rack up huge amounts of credit card debt while attempting to give their loved ones what they wanted for the holidays.

If you have put yourself in this position, the unfortunate truth is that only time and regular paychecks can get you out of the debt that you have already incurred. That being said, there are several steps that you can take to limit the amount of debt that you build up this coming year.

The most obvious answer is: “Don’t purchase what you don’t have money for!” However, many people experience circumstances that force them into using their credit card. Here are a few tips that will help you limit your debt in 2014:

• Minimize In-Home Expenses

The truth is that many people overspend money on their household ‘needs’. The gas bill, phone bill, cable package, home insurance, and rent contribute to your overall run rate.

Shop around with several insurance companies to explore the possibility of bringing your monthly payment down.

Purchasing several small space heaters to place throughout your home or apartment may help to reduce the amount of money that you pay out to your gas company every month.

With the popularity of cell phones these days, do you really need that land line at home? Disconnect it and that money will stay in your pocket. Cable television is in the same boat as your home phone. More companies are beginning to offer TV shows for free if you stream them online. Better yet, make reading your home entertainment or downtime pleasure.

You will also benefit from seeking bargain deals at the grocery store every time you visit. Finding cheaper alternatives, especially when buying bulk items, can add a significant amount of money to your wallet. Promotional coupons, buying sale items or store label items all contribute to reduced spending.

You should also consider saying “no” more often when asked to host or cater family gatherings or ‘football night with the friends’. This will significantly reduce the amount of food goods that you purchase and don’t consume yourself.

• Movie Madness

Whether we like it or not, this country is incredibly infatuated with Hollywood. Trips to the movie theater are frequent for family occasions, date nights, or chill time with friends. Many people will make at least 15-20 trips to the movie theater every year. This is most likely even a conservative estimate, but 20 trips at $12 or more per ticket will add up quickly. You do the math!

Movies are expensive. Especially if you are going in the late afternoon or evening. Try attending more matinees this year to save some cash. $6.50 rather than $11.75 sounds like a bargain any day!

Furthermore, renting movies via Red Box or Blockbuster, or simply streaming movies online will render the movie theater almost obsolete, so long as you can curb your enthusiasm to see that killer action movie on a humongous screen!

• ‘Friends with Benefits’

No, no, it’s not what you think! Many of us know several friends, or friends of friends, that offer some sort of service that you regularly pay an exorbitant price for.

Finding friends to take care of handyman work around your house, cut your hair, take your Christmas Card photographs, or care for your pet while you go on vacation will save you a considerable amount of money.

Yes, it might sound a bit like you are taking advantage of your friends. This is not the recommendation. Friends will simply offer these services at a much lower rate than the normal contractor. Furthermore, friends will tend to be more open to homemade gifts, baked goods, or other non-traditional forms of payment for their services.

Nobody enjoys digging a ‘debt hole’. Going forward into the New Year, minimizing your in-home expenses, reducing the amount of money you spend on movies, and seeking out ‘friends with benefits’ will help you to reduce your budget and, subsequently, reduce the amount of debt that you find yourself in at the beginning of next year!

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