Reducing Your Debts: The Basics

debtIf you’re looking around for different debt solutions , it may be worth remembering that it really boils down to two ways to reduce your debt options A and B:

A. Increase your income

B. Decrease your expenditure

Both these things area far easier said than done – but they’re the only way it’s going to happen, so it’s time to focus…

A. Increasing Your Income

Here are a few ways you might be able to increase your income:

  • Try for a better paying job.
  • Get a part-time job – if you can possibly the time.
  • Sell some of your stuff.
  • Politely ask for a pay rise (it’s always worth a try – think about your worth to your employer and how you might increase your “value”).
  • Star up a new business venture.

B. Decreasing Your Expenditure

This is usually an easier target for most of us than increasing income.

But first things first; if you’ve already arrived at the stage of having to contact your creditors for assistance in reducing your payments and maybe freezing the interest on your loan, you are also going to have to think about what your creditors will consider to be reasonable expenses. For example, if you’re subscribing to satellite TV, you’re likely to receive a curt reply if you continue this subscription whilst requesting for a reduction in your loan payment!

Other quick and relatively soft targets you may be able to make savings on are:

Newspapers, milk delivered to the door, bought snacks, your mobile phone bill, your home telephone, any rental agreements you have in place (TV etc), utility bills, insurance and grocery bills.

Often, the savings you can make in these small ways may seem very paltry in relation to your total income or your total level of debt. But don’t forget, you’re fighting a war of attrition here. Every penny you can save helps gradually tip the scales in your favor, reducing interest payments until you gradually become completely debt free.

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