Many of us have felt the effects the recession and the faltering economy. As credit card bills, school loans, home and car loans and everyday expenses add up, your debt may seem overwhelming. 
It can easily rise to staggering figures. In a time when more than half of all Americans are in credit card and mortgage debt, it’s important to be part of the minority. Simple life changes, determination, and dedication can help save your credit score, eliminate debt and put you back on your feet.
Cut out simple luxuries
The first step is to cut out unnecessary luxuries. It might be a hard decision, but you can save a lot of money by cutting back on grocery costs, entertainment, eating out and shopping. This may even mean skipping out on a few vacations or trips. An easy way to cut on leisurely spending is to create a weekly allowance. $100 weekly, for example, can be budgeted to cover gas, food and shopping. By following this allowance, the rest of your money can be added to your savings or payment for your debt.
Minimize your groceries
One of the simplest ways to save money is to minimize your grocery list. Just focus on the essential food groups and limit your list to a few items that will last you throughout the week, like vegetables, meat, bread and dairy. You really don’t need those Oreos.
Downsize your residence
Downsizing your current living situation can be beneficial to your budget. Move into a smaller apartment or consider getting a roommate. It may not be ideal, but it won’t be forever. By making this sacrifice, you are sure to save nearly half or even more than your total housing budget.
Save your tax returns
Bank your annual tax returns. Taxes are great because they basically force you to save. The taxes from each pay check build your savings throughout the entire year. By the time your tax return arrives, you will have a large chunk of money that you can use. The best part is that it can feel like you are saving money that you never had to begin with since it was never part of your day to day budget. DO NOT spend your taxes before you receive them.
The phrase “don’t live beyond your means” is simple and straight to the point. Follow it and you will make it out of debt. It will surely be challenging, but cutting out daily luxuries and leisurely spending can save a lot of money fast. The economy is looking very hopeful, but we’re still recovering. The keyword is “save.” You can save money by cutting back on unnecessary expenses. With determination, you can take control of your debt in order to make big financial advances.
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So you’re recommending to save money to pay more debt off, which makes sense. But would it not be advisable to first save to have a cushion in case of illness or unemployment. I thought the rule was to have 3 months income in savings for eventualities, and then consider spending or paying down debt. Am I mistaken?
Hi Shelly! Nice to chat with another Shelly LOL. Yes its very important to have a cushion but I think its also important to get out from under a heavy debt load. If you can start to save more money each month by paying off some of that high interest debt that would be very advantageous! My bank savings account is paying me about 1% on my money. To me its basically just holding my money in a safe place. But if you have a high interest debt, think about how much more money you can put away each month AFTER you get rid of that debt. I think both can be done at the same time, but I would concentrate on just putting away a little in saving at first, getting rid of the high debt and then being able to save even more money each month. Of course this is just my opinion. You have to go with what your gut is telling you to do.
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Take Care
Shelly
I found the comments to this fine article as interesting as the article itself. I too have been holding onto a cushion while struggling with a debt load, all of which is charging me a lot more than my bank is paying me in interest. And to add a measure if irony, my bank is also one of my creditors so they are making money off me twice. It makes sense to pay off the debt, as uncomfortable as having nothing to fall back on may be. Thanks for sharing your expertise.
Glad you liked it Geoff!