So what if you live beyond your means? If you don’t pay your bills and it’s coming back to haunt you, you may want to look at your options. If your debt affects your life negatively you may want to brainstorm solutions. After completing the Master Plan you can assess whether or not you are living beyond your means. Your total income minus your expenses equates what you have left at the end of the month, after all the bills are paid. Don’t forget, pay your bills in full on time! When you divide your total debt and by the magic number (income – expenses), you will find out how many months it will take to pay off your debt. Sometimes this can be a yikes! However this yikes can also motivate a family to make small changes to lower this number considerably and improve your overall quality of life.
What changes? Well there a number of aspects in which change can occur, 3 of which are; reduce expenses, minimize waste and reduce fees.
Look at your master plan and determine what expenses can get shaved down a little. Do you need to spend $250 on groceries each week? Can you shop using a flyer and make an effort to buy what is on sale or in season? We can become a little spoiled getting what we want, when we want it. Making that effort can shave off $25 a week, that’s $100 a month already! Next…been with the same insurer and never had any other quotes? What about your satellite bundle? Is that 19.99 promo that got you to switch providers now over? Plus movies you purchased, plus additional receivers…do you really need 5 tv’s teaching your children who knows what? Remember bundles of any sort lock you into a contract limiting your flexibility. Involving other family members with changes helps to avoid backlash.
Do you turn things off when not in use. In Ontario our hydro just went up again! If you are on time of use meter can you do laundry on the weekend and after 7 when it is half price? Do you grocery shop once a week and eat what is in the fridge? Eat what needs to be eaten before the food that won’t go bad (frozen and canned) to avoid throwing out 1/3 of your fresh food by the next week. What about making things last? Between the toilet paper, toothpaste and the shampoo I sometimes thought it was a race to see who could use them up first lol. Educate, don’t berate. Kids don’t know and when we teach them kindly they listen because they feel like an important part of the team.
Are you paying fees for using other ATM machines? Do you have multiple bank accounts with fees on each and just transferring money from one to the next to pay bills? Interest on a credit card, overdraft fees, interest and monthly bank fees are why bank profits are in the billions each quarter. That’s your hard earned money being handed over. Is that why you work so hard, for their benefit?
Often when I sit with people we can find $200-300 to carve out of their monthly budget and lower their debt repayment time period to half! It takes a bit of brainstorming but you can do it! Remember let your goals guide your efforts. Cutting back on something isn’t that hard if there is a reward! Reward the whole family and they will be more likely to play the game 😉
Changes don’t happen overnight however…one change can lead to two, and two can lead to three…Focusing on what we CAN change is the secret to success. It is healthy for the earth, healthy for your finances and healthy for us all!