Proactive Approach to Reducing Your Debt Faster

Many consumers are content to sent our their monthly bills and credit card payments and go about their day, not really considering much else about their bills once paid for the month. However, there are plenty of things you could be doing in order to reduce your debt faster.

It is up to an individual to take control of their finances and taking a proactive approach to your matters of money can make a huge difference in the amount of money you can save yourself in a short period of time.

Here are a few tricks for improving your financial situation each month. These tips can help you reduce your expenses and debt more quickly than you might be doing now. If any of these ideas (or if all of the ideas) work out well for your particular situation, create a checklist for yourself to use each month as a reminder of what you need to keep doing and don’t forget to keep adding any other great ideas you discover on your own or learn from others.

Track Expenses - If you keep up with a budget and take the important step of tracking your monthly spending, tally up what you are spending and where. Keep good records so you know where to cut out costs. There is no point in tracking and budgeting if you aren’t going to analyze how you are doing each month. Use this expense tracking worksheet to help you.

Analyze Bills and Statements - Everyone is prone to making mistakes. Check over all of your incoming account statements and bills each month and make sure somebody’s mistake isn’t costing you more money. Review carefully and look for new charges, unauthorized charges, or anything you just don’t understand. Contact the company for an explanation and put any corrections or changes you want made in writing to the company as soon as possible.

All to often, consumers don’t bother to look over the information they get and instead just file it away. Only when the problem becomes bigger or more obvious do they take action. Waiting can sometimes hinder a successful resolution.

Reduce Interest - If you are making regular payments above the minimum requirements, there is no harm in contacting the credit card company and requesting a reduction of your interest rate. They may say no but you won’t know until you try. In the event the company agrees to honor your request, you’ll end up saving yourself more money in the long term. Keep a list of all of the company phone contacts and check in each month to discuss your account.

Search Out Deals of Month - Department and grocery stores often do their advertising and marketing well in advance of a sale. Check the local newspapers or store websites for the deals of the month and make notes of what goes on sale when, who is planning a close out clearance sale, and consider what items you could use at a great savings.

In-Home Maintenance - There are a lot of little things around the house that can improve the efficiency of energy use in your home. Changing things like the filters on your air/heating unit and your vacuum cleaner can help save energy. Make routine checks of the interior and exterior of your home looking for cracks or other issues that could lead to bigger problems if not taken care of quickly, such as cracks or leaks.

Clean Out the Clutter - While performing the routine maintenance checks, keep an eye out for any junk you no longer have a use for. Things in good condition can be sold on eBay or craigslist to make extra money. If you have the energy and the space, create an area to house empty boxes. Start getting into the habit of picking up items you no longer want or need and start filling up the boxes. Consider it building inventory for your next yard sale. To be even more efficient, price things for the yard sale as you add it to the boxes to save you a step down the road.

Save Recyclables - Many communities have an active recycling program where you can dispose of your used plastics, glass, and newspaper. However, there are some places that will pay for your recyclables. Start saving your tin and aluminum cans and find a place where you can unload them for cash. You might be surprised at how much extra cash you can get collecting cans from your neighbors, friends, and family. Put the extra cash into your rainy day fund or save for something special.

Set New Goals - If you have been keep up with a budget and working to pay off debt, there is always room for new goals, especially as your financial situation begins to improve. Make short term and long term goals and review them each month to see what changes need to be made.

Make a New Monthly List - As you get in the habit of doing some of the above step - what works for you will no doubt become a part of your regular life. Keep thinking of new ways to cut costs and reduce debt faster. Make a new list each month to keep things fresh even if you’ve no new ideas to add during a certain month.

Photo by Daveybot