5 Get-Out-Of Debt Tips For Millennials From People Who’ve Been There
When you are out of college, you might see all your bills and debt pile up before you while your income is not increasing as fast as you thought it would. You try to make decent efforts to settle them once in a while, but after a while, you will feel that you are still deep in debt. This, however, is not a new scenario for a lot of millennials. Here are some tips that could help you get through your financial crisis.
Minimize Going Out
Having some meals or maybe a glass of wine does not look like it hurts your budget, but you will surely be amazed at the amount that you save if you cut eating and drinking out. When author Lauren Greutman and her husband realized that they were spending $1,000 on food every month, they were able to slash that budget to just $200 by completely cutting out restaurants and being more thrifty on grocery choices.
One pretty simple way that you can save big on your food and grocery budget is to plan out a week of meals every time you head out and do your groceries. You can see which supermarkets have the best offers when you browse through social media once in a while. When you plan ahead, you will not have a lot of food in excess and you can take advantage of good sales.
While in your 20s to early 30s, you might find out that all your debts and dues are piling up before you before you know it. This is why it is important to set aside a couple of hours to organize which of your debts are about to be due and which of your bills you would have to pay already.
If you have been receiving your statements on paper, go through each of them and try to have them converted to electronic delivery. Do some arrangements to have automatic payments on the due dates and return to pay more when you can until each bill is paid in full.
Plan Your Expenses to the Last Cent
Millennial Lauren Bowling managed to get rid of her credit card problem in just 90 days. At the time in 2015, the financial blogger successfully paid off $8,432 in bills. The first step was finding out how much she owed exactly.
“I played with the numbers and figured out what I would need to pay each month in order to pay it off,” Bowling told CNBC Make It. Luckily, she had $1000 in savings so it was a good start. She then computed that she needed to pay $600 per week to be out of the red in 3 months. “You really have to focus and not allow yourself to get distracted or discouraged,” she added.
Millenials have a tendency to live beyond their means in response to lifestyle pressure. You might not be aware that you already are spending more than what you need to survive, yet you do not have money when it comes to paying your bills. If this is the case, you need to take drastic measures and cut down your spending to a very detailed budget that you can honestly keep.
Make sure that your budget is not too flexible as you can still make reckless purchases. While you can start off with a margin of error, you can work on this and develop discipline when it comes to spending. This will leave more room for the necessaries such as electricity, water, rent, and debts.
Pay Off Your Student Loans
Statistics show that there are more college graduates for millennials than there have been for any other generation. However, millennials have the highest debts as well, in fact, around 34% of them constantly worry about being able to pay their study loans.
If you are having trouble making your loan payment or if it gets hard to pay the full amount, let your lender known about other payment options and inquire as to which are the most feasible.
Discipline Yourself and Keep Saving
When your dues keep piling up and when your lifestyle does not show how broke you really are, it only means that you lack discipline and your money is not where it should be. Had your money been where you have been supposed to do it, all those bills and dues of yours will not pile up in the first place.
While there are many ways to tackle debt and a limited income, there is just no substitute for discipline and savings when it comes to meeting your financial goals. Unless and until you start cutting up unnecessary things and limiting yourself to a reasonable budget, you are not going anywhere.
You might be deep in debt, but you are not out of hope. Being broke is temporary, but having discipline and a strong financial IQ will take you places. Do you know of any other financial tips that Millennials can use? Share them with us in the comments below.
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