Thoughts on Debt

These days I think that everyone is becoming more conscious about how they are spending their money.  The companies who have the necessity items and have them for less are about the only one’s that are profiting, as a matter of fact, it seems that overall most companies are really hurting and reports show that we are not buying anything extra these days.  This includes items like clothing, jewelry, electronics and so forth.  We are instead, looking for new and better ways to hang on to our money, and miscellaneous spending is becoming a thing of the past.  There are some very simple ways to go about saving some money, and so here are just a few of the ways that cutting back a little can save you a lot in the long run:

1. Make coffee at home rather than buy it every day. You’ll save about $2 a day or $40 a month. This is $480 a year, and that can be money in the bank.  Depending on where you go, it could be a lot more. 

2. Bring in lunch from home instead of buying it. You’ll end up with at least $5 - $7 dollars a day in your pocket.  That is a $25 per week savings at least, and a savings of $1300 per year.  Now that would make a nice vacation don’t you think?

3. Stop getting delivery of magazines and newspapers at home. Most of the content is available online and you can read it everyday—for free!

4. Shop around for credit card interest rates and consolidate credit cards, if you keep a balance.

5. Use cash or debit cards instead of credit cards and incurring interest charges.  Not only will this save you more money on the interest charges, but you will also be more aware of what you are spending your money on, and how fast it goes.

6. Save your stamps and pay bills online, usually for free.  Most companies will allow you to make payments right on their web site, either using a check or debit card, and most banks offer online bill pay services for nothing as well.  This is a very convenient way to pay your bills, and you can also put them on automatic payment, which is great because this way your bills will get paid on time, without missing payments and accruing late charges.

These days every little bit of savings helps.  It is nice to see the gas prices come down, but who knows when they will go back up again and grocery prices are still high.  So be sure to keep a good handle on your spending the rough economic times are not gone yet.

Everyone thinks that using a debit card instead of a credit card, is the wiser, less expensive way to go.  Well, let me state it very frankly for you, this is only true if you are using your debit card wisely.  Let’s say that you have a credit card and you make 10 charges on that card then you will have to pay off the balance in about a month and the interest won’t accrue very much at all.  But let’s say that you have made those same 10 charges on your debit card and you haven’t correctly balanced your account and then you receive return check fees on those 10 items in the amount of $35 per item, then that would be $350.00 for charging those 10 items, so quite frankly it can cost more using your debit card if you are not careful with your money.

This quite frankly goes back to the old philosophy that the rich get richer and the poor get poorer.  Honestly, have you noticed that when you don’t have money, they charge you more money.  If you don’t pay your bills on time, they make them bigger by adding late charges and/or interest.  If you don’t have money in your account and a check comes in they charge you a fee.  Sometimes the fee is actually bigger than the item.  So the fact is, if you want to hang on to your money, then don’t buy what you can’t afford.  This can be difficult in trying economic times or when things come up, but quite honestly, this is the only way to get more money.

If you see yourself in this situation, work hard to rectify it.  Keep good records of what you have spent and what is in your account, and keep at least an extra hundred dollars in your checking account just in case you forget about something that you paid or have an automatic withdrawal that you forgot about.  These can be deadly if you don’t keep up with what dates certain things get withdrawn.  In any case make a plan and stick with it.  Good record keeping is the key, so stay on top of it and don’t be caught short, it will cost you big time.