Debt Relief | Simplify your Finances in 6 Easy Steps
The 80/20 Rule
When it comes to the 80/20 rule, I’ve been applying it to everything in my life, especially in regards to subjects such as financial stability and debt relief. When it comes to my home, work, car, clothes and even my wallet, I have been trying to get rid of all the subterfuge and hold on to the necessary components.
Understand that we use 20 percent of our things about eighty percent of the time, and 80 percent of our things 20 percent of the time. When you realize this, it’s best to whittle down to just the 20 percent that you use and live without the remaining 80 percent. You could relate the same example to your finances. Here are a few simple ways to diminish your financial problems.
Step 1 – Remember Your Checkbook Register?
Yes, I am talking about your checkbook register. You can use it to track every deposit, check and debit card purchase. You will eliminate worrying about overdrafts. You will be totally aware of what’s in your checking account. Also, you don’t have to carry the check register around with you everywhere you go. You can leave it at home or even in your car. Just make sure that you update it with your receipts once a day, just to stay abreast of your daily spending.
Step 2 – Limit the Number of Credit Cards You Own
Break down and keep only two credit cards in your possession. One card should be used for things such as groceries and recurring monthly bills, while the other one should be used for personal expenses such as gifts, gas, personal items, etc. Soon it would be a good idea to just abandon the personal card altogether and stick to the idea of spending saved cash instead.
Step 3 – There is Potential in Automatic Bill Pay
Try setting up bill pay through your checking account and then forget about it, save when it’s time to update your checkbook register. You can set the account up so that your bank pays your bills as opposed to your bill collectors withdrawing money from your checking account. This is a nice way to keep control over your account, as well as make your monthly bill payments flow more smoothly every month.
Step 4 – You Should Be Paid First!
This has to be everyone’s number one favorite financial tip. The concept is steeped in truth, and gaining more widespread acclaim. Who wouldn’t want to pay themselves first? The concept simply means that whenever you are paid, you transfer money to your savings account before you pay anyone else any money. For example, if you are paid $450 a week, it would be in your best interest to put at least $50 in your savings account immediately. This helps to keep you from worrying about spending money you should have saved.
Step 5 – Stay Away from Advertisements
We could definitely steer our way into debt relief after realizing all of the advertising that prompts us to spend money. How many times have we purchased a product that we claimed to love, only to see an advertisement for something else, and say to ourselves, “If only I had that…?” It’s not a very good thought to dwell on, but advertising wizards are paid mega bucks in order to brainwash potential buyers. Never assume that you are stronger than these individuals and can withstand their lures of purchasing ecstasy. Try to avoid sitting through television commercials, and reading ads in magazines. Remember that the fewer ads you see, the less tempted you will be to pull out your wallet.
Step 6 – Simplify, and Buy Only What You Need
It’s a very good idea to buy only when you need it. Contrary to what most frugality fanatics might say, I would advise you to purchase only what you need while you go shopping. Say, for instance, you saw a good deal on some eggs, but you normally don’t eat eggs a lot. It would be pointless to purchase something, even at a reduced cost, that could possibly go to waste. You could also eat healthier but just buying two to three days worth of food. The results are that you’ll spend less money and you won’t find yourself overeating, which in itself could possibly lead to the need for debt relief.