If you’ve been following our Forget the Joneses series, by now you should have computed how much money you’ll need to retire, to pay off debt, and build your emergency fund. For some of you, there isn’t enough cash to make it happen. Others may simply want ways to reach financial security sooner rather than later.
Even if you’re coming up short, there are ways to accelerate your debt payoff by adding income or cutting monthly expenses. Some ideas are more drastic than others, but if you’re motivated to become debt-free you know that the feeling of financial freedom outweighs hanging on to material things.
Re-evaluate and Cut Monthly Expenses
Instead of subscribing to an expanded cable package, cut back to the most basic package and supplement with other media. Read more. Swap magazines with a friend. Watch TV shows and movies via Netflix, which is just $7.99/month for the streaming-only option. Instead of buying new DVDs or renting them, create a queue using library holds and inter-library loans. This works for books, CDs, audiotapes and other media too. You’ll get a steady stream of new selections each week and it won’t cost you a penny. By saving $50 a month, you’ll come out $600 richer at the end of the year.
Re-evaluate Phone Plans
Are you using up all your cell phone minutes? Do you have more coverage than you need? Consider switching to a different plan or a pay-as-you-go plan. With your landline, consider dropping the added features such as caller ID and call waiting. If you mainly only use your cell phone, ask yourself if you can do without the landline altogether.
Get New Insurance Quotes, Raise Your Deductibles
If you haven’t re-evaluated car insurance policies lately, you could be paying too much. One quick way to save is to raise your deductible. If you’re deductible is set at $500 consider raising it to $1,000. Yes, you’ll have to pay more out-of-pocket if you’re in an accident, but you could save up to 30% on your rates throughout the year. Or, if you car is worth less than $2,000 you may want to drop collision insurance completely. Consider bundling your auto insurance with your homeowner’s insurance to save even more.
Exercise the Old Fashioned Way
Instead of spending $75 or more per month in health club fees, exercise the old-fashioned way and do something productive at the same time. Household chores like mopping, vacuuming are great calorie-burners. Outdoor chores like cutting grass, washing your car, raking leaves and gardening, burn nearly as many calories as a slow jog. Supplement your fitness routine by jumping rope or dancing with your kids and taking your dog for a run and everyone comes out ahead. You can also find free workouts on YouTube as well as rent fitness DVDs and videos from your library.
More information: 100 Ways to Exercise for FREE
Focus on the Family: Limit Extracurricular Activities
Families are typically overscheduled in today’s day and age. While extracurricular sports and activities are important, spending time as a family is more important. If your kids are in several extracurricular activities, you may want to consider dropping a couple. Instead, institute a family game night. Cutting back on 2 or 3 activities can help you save an extra $100 per month as well as strengthen your bond as a family.
- Become a one-car family
- Downsize your house (or apartment)
- Move to a less expensive location
If you’ve cut all the expenses you can and still are coming up short, consider adding more income. If you had to think of a way to earn $10 today, what would it be? Is there a way you can use your interests, talents to accomplish that? That’s how many small businesses are born. Many dreams start out small; just $10 here and there and grow into something much bigger.
- Get a part-time job (you or spouse) away from home
- Babysit or daycare
- Participate in paid surveys
- Mystery shopping
- Create something to sell (scrapbook pages, sew something, etc.)
- Sell something via direct sales
- Sell something: Hold a garage sale, eBay, Craigslist
Make-It Happen Assignment: Make a list of the things you are willing to do to accelerate paying off debt, building savings, and save for the future.