Most money reducing tips are aimed at individuals who have extra money coming in each month that they are not using correctly. Most tips for reducing debts are not aimed at individuals who are just getting by, or who are coming up short every month, even without unnecessary incidental spending. These tips are designed to help individuals who are just getting by to start getting ahead.
#1 Call Your Credit Card Company
First, you need to call your credit card company and see if you can lower your interest rates. Credit card interest rates can often hover at extremely high percentages. Interest rates of 20% or higher are common on credit cards. That can leave you paying off the interest for years if you are only able to make the minimum payment.
See if your credit card company is willing to lower the interest rates. If they are not willing to lower the interest rate, see if you can move your balance to a new card that offers six to twelve months no interest with a balance transfer. This will give you a chance to start paying off the principle on your credit cards, instead of only paying off the interest. This is a good strategy for actually making progress lowering your debt level without increasing your bills.
#2 Try to Get Lower Rates for Services
Next, see if you can lower any of your other bills. Call your cell phone company, mention how long you have been a loyal customer, and see if they can provide you with a more affordable plan. Do the same thing with your cable bill as well. Lowering cell phone and cable bills can give you a little more money that you can use to either save or pay down debt, while working with the budget you have.
#3 Reconsider Transportation
Transportation can be really expensive. Between car repairs, insurance, and gas, transportation can really eat away at your budget. Spend a week writing down every single trip you take with your car, how far you drive, and why you make the trip. If you live in a two or more vehicle household, have everyone do the same.
Then, look at your routes and trips. Are there any trips that could be combined together to save on gas and time? Are there any trips where alternative and more affordable transportation could be made? Try to find ways to reduce your gas budget to give yourself some more breathing room.
If you have a two-vehicle household, see if you can get by with just one vehicle. Cutting back on gas, maintenance, and insurance for one vehicle can really allow you to pay off debt and increase your savings. Cutting back to one vehicle requires tough scheduling, so work together to create a transportation plan, park one vehicle for two weeks, and see if you and your family can get by. If you can, sell the car. Put the money into savings and dedicate the money you save each month to paying down debt.
You can find ways to pay off more debt even if you are living paycheck to paycheck. Work to get a reduced interest rate on your credit card debt, and if not, move the balance to a card without any interest for a while so your payments will finally reduce the principal balance. Try to get a better package on your cell phone and internet bill and put that extra money to good work. Find ways to reduce your transportation budget. Take these small steps to move your finances in the right direction when working with a small budget.
Consider consulting a fee based financial planning service for more help.