Cut 10% Out Of Your Flexible Expense Budget To Pay Off Your Debt |
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| By: Susanne Myers | ||||
Your family budget consists of expenses that are fixed and expenses that are flexible. Typically, a family has an estimated expense each month for food, clothing, and gas for the cars. This estimate usually is based on a history of spending. Let's take a look at what would happen if you chose to steal a little money from each of these expense categories. FOOD - Families spend somewhere in the range of 10% to 13% of their income on food. This is according to both the Department of Agriculture and the Bureau of Labor Statistics. Other studies even indicate that some families spend as much as 20% of their income on food. What percentage of your income are you currently spending at the grocery store? If you are spending 20% of your income on food, there will be some real changes made here. Even if you are in the other smaller range of percentage, change is hard when it comes to food, but you'll see what happens if you just take 10% off the top of your food budget. Just to make things simple, let's say that you spend $100 a week on food. If you imagine your shopping cart, could you remove just $10 worth of items? If it's hard to give up your favorite luxuries, imagine the money you'll have in your pocketbook at the end of five weeks of skimming just $10 off the top of your food budget. How does $50 extra paid toward your debt reduction feel? Now can you remove a few items from your cart? Having an extra $50 to pay down your debt makes life a whole lot easier. And, getting that extra money is easy when you skim just 10% from the grocery budget. Once you get used to that extra money, you'll be happy to remove those luxury items from your grocery cart! And, when you start seeing your credit card debt drop faster and faster each month, you'll be happy to cut back even more. CLOTHING - Looking at your clothing budget is another excellent way to find extra money. Again, the first step is taking 10% right off the top of your monthly budget. Once you decide that you are going to spend 10% less for clothing, you'll need to find alternate ways to buy clothing. In other words, stay out of the mall. Everyone is looking for bargains, so it's no surprise that the whole resale and consignment markets are exploding. At least one or two new shops opens in our city almost every month. These shops are geared up and ready to provide penny-pinchers like us with some real great deals. There are many consignment shops now that are catering to specific clientele, whether it's business attire, formal wear, or kids clothes, you'll find what you need. The old church thrift shops are growing, as well. It also seems as if Mom's groups are spending more time exchanging clothes at play dates. Some clothing exchange groups are quite extensive, but just getting together with your friends may result in at least a few swapped items. If you have teenagers in your house who love fashion, there are online exchanges that are very upbeat and carry very popular messages. The clothes are fashionable and the message includes recycling fashion as the green thing to do for the planet. Look for sites like FreeStyle Clothing Exchange. It's very fun and has an excellent mission that your teenager will love to get behind. GASOLINE - Even if you have become accustomed to filling up the car whenever you want, you can break this habit. A budget that assumes you fill up your car three times a month at, say, $50 each time, allows you to spend $150 a month for gasoline. What if you only allowed yourself $45 three times a month? Would it impact your driving habits that much? That $15 savings each month could start to put a dent in your credit card debt over time. A mere $15 each month may seem like a drop in the bucket, but over a year's time it amounts to $180 available to you. Paying that amount on just one credit card makes a difference, especially as the payments are made each month and the interest charged to you keeps dropping and dropping with each payment. This is no chump change! Now, that 10% skimmed from your gasoline budget may call for a bit of frugal travel. Every time you climb into your car, you will need to ask yourself if there is another option available to you. Can you take public transportation, walk, ride a bike, or car-pool? If parents are driving kids around to events, can you discuss pooling your rides? There are probably people you work with or play with that are looking to cut back on their driving, too. Planning your driving routes can really help cut down on back-tracking, especially when chauffeuring children around to their events. This is probably one of the most difficult driving habits to re-evaluate. If your children's activities overlap, rather than run one child home in between, perhaps it's possible to stay at the event with both children, until the next ballgame, meeting, or school event starts. Flexible expenses in the family budget normally have quite a bit of slack in them because we are basing those figures on what we've spent in the past. However, this is not working so well if you are still struggling paying off your debt. You've got to change your habits and the easiest place to start is where you know you have at least a 10% cushion. It won't be that hard for you now to find some extra cash to pay on your debt. Simply run down the list of monthly flexible expenses in your family budget and swipe 10% right off the top of each item. Add those dollar amounts and just look at the cash you already have! Multiply that amount by 12 and look at what you have for the year! When you think of what that money means to your family's financial security, I'm sure you'll be more than willing to find a way to dig right in! |
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| Article Source: http://yourfinance.co.za | ||||
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