There are basically two things you can do to regain control over your personal finance: you can either increase your income or reduce your expenses. When you are dealing with a series of bad debts and struggling to make ends meet, it is necessary to make these changes in order to balance your monthly budget and take back control gradually.
Controlling your expenses is usually the easier of the two. You can review your current expenses and start making cuts to expenses that aren’t absolutely necessary. You can take further steps to reduce the expenses you cannot afford to cut as well. The tips and tricks we are about to discuss in this article will help you save on the regular expenses you cannot completely eliminate.
Be Smart with Your Energy Bills
Your energy bills can be reduced through some simple changes. You can start by gradually switching to LED bulbs to reduce the electricity you consume. Remember that no amount is too small to save and the amount you save with each LED bulb you install makes the investment well worth making.
LED bulbs are not the only way you can save too. You can also be more frugal with your appliances. Rather than leaving them on standby, unplug the devices you don’t use. Even when they are not in use, electronic devices still consume a small amount of electricity. Those small consumptions add up; you’ll be surprised by how much you can save every month with this tip alone.
Other small changes are just as valuable. You can, for example, lower the target temperature of your water heater. Adjusting your thermostat by one or two degrees also help lower the cost of heating (or cooling) your house by a substantial margin. The more of these small changes you make, the bigger the impact will be at the end of each month.
Reorganize Your Loans
Debt repayments can be difficult to manage when you have more than you can afford to pay. Your debts come with costs and failure to meet the payment deadlines means more costs to cope with. This is a vicious cycle that needs to be broken.
You can ask your lenders to freeze your loans and turn them into fixed monthly payments; you may even negotiate for interest waiver if you can show that you are in a bad shape financially. That said, not all lenders will agree to the terms you have in mind.
Another alternative is consolidating high-cost loans into one debt that can be managed easily. You are not only making your debts easier to deal with, but also saving a lot on interest and other fees. On top of that, you can work towards finding a consolidation loan you can afford.
Other options are worth considering too. Individual Voluntary Arrangement or IVA, for instance, can help you repay most – if not all – of your loans without hurting your personal finance more. However, these options come with additional consequences, so make sure you use them only as the last resort.
Eliminate Unused Subscriptions
Are you subscribed to both Hulu and Netflix? Do you really need that Amazon Prime subscription? Subscription services are great because they offer a more cost-efficient way of getting the services you need. Rather than paying for shipping, you can actually save with a well-used Amazon Prime account.
The subscriptions that you don’t use are the ones you need to start managing. £2 here and £3 there still add up to a substantial amount at the end of the month; remember, no amount is too small to make. Rather than paying for the services you don’t need, eliminate the unused subscriptions and save the money instead.
This tip applies to your cable TV, the newspaper you seldom read, and other services that come with a monthly charge. In some cases, you may not realize that you are paying for extras that you don’t even use, hence the need for a complete review of all the subscriptions you pay for.
Don’t Forget Your Insurance
The one thing you don’t want to eliminate is insurance. The insurance coverage you have actually protect you from additional financial risks. That doesn’t mean you cannot take active steps towards saving on your insurance premiums.
Bundling several insurance policies and getting multiple coverage types from the same insurance company are some of the ways you can save on your insurance bills. You can also compare insurance deals and even ask for a better quote the next time you need to renew a policy. Make sure you are getting the best coverage for your money and saving the maximum amount.
The more of these small savings you make, the more money you can allocate towards repaying your debts, and the sooner you can improve your personal financial state. It will not be long before you start saving money, investing more, earning additional income, and regaining control over your personal finance.