Blonch

If you’re struggling with your credit cards and trying to get out of debt and trying to get out from under it, one of the first things you’ll need to do is get your spending under control. After all, lower spending leaves more money to pay off those credit cards. Here are some good tips for reducing your spending without sacrificing your family’s comfort.

1. Supermarket discounts – These can be found in unlikely places, not just in the weekly coupon circular and the discount store card. (By all means, get and use both of these!) For example, when my wife was in between jobs several years ago she took a job as a checkout person at the local supermarket. It turns out that there was an additional 10% employee discount added to the discount store card whenever you buy store-brand items.We typically bought alot of store-brand items (another good savings) so we’d end up saving several dollars every time we shopped. Now, here’s the great part: she only worked there for about a month, but the employee discount continued for over a year! The moral is, take full advantage of every discount the supermarket has to offer.
2. Public Library is your friend – I and my daughter are book hounds, and my whole family loves movies. That used to mean frequent trips to bookstores and video rental stores. Once the credit card monster reared it’s ugly head, we were forced to cut back on alot of things but this was a challenge. (I mean, come on – movies are a few dollars, but paperbacks run over $7 a piece. ARGH!)Enter the public library… it turns out that our local library had many of the books and movies we wanted, and every one of them for free. Plus, they have this deal where you go online and request specific titles, and they pull them off the shelves and hold them for you. My long trips to the library now consist of a quick pop in to pick up my order at the checkout – sort of like fast food for media. Now I save money and time!
3. Shut off the damned lights! - This comes from the dad in me, and doubly so since I live in Texas where temperatures hover near 100 degrees for most of the summer. Electric rates can be insane, so any savings you can come up with here will pay dividends. For example, shut off your computer, monitor, speakers, etc. when you aren’t using them. They slowly chew up electricity all day long, so why have them costing you money when you’re not using them? Ditto your various chargers for phones/power tools/etc.; these put a slow drain on your power that can add up over time. And (here’s the dad again) shut off lights when you aren’t in the room, especially when they’re regular incandescent bulbs.  (I recall a recent episode of Mythbusters that showed leaving the light on while you’re away didn’t save electricity over turning off and on again unless you were out of the room for like 5 seconds or less. Electricity is money, so saving electricity means saving money.
4. Play the Cash Flow Game – When money is tight, cash flow becomes a prime consideration for your spending behavior. Consider this: most bills have due dates and then dates where a finance charge kicks in. This means that if you pay up between these two dates you hold onto your money longer but don’t suffer the penalty of paying too late, right? Well, not so fast, because consistently late payment behavior can be a red flag on your credit report.Your better use of this cash flow technique would be to pay as close to the due date as possible, avoiding both the penalty and the onus of “late payer” status. Similarly, bill paying by check is usually better for cash flow than using your ATM or online system since the ATM/online transfer hits immediately where the check will be delayed by the mail. There are exceptions, though…
5. Watch for bill-paying deals – Businesses buy things on terms, usually payable within 30 – 45 days. However, sometimes vendors will give them a cash discount for paying early. Look for these sorts of deals in your own bills because these could save you some serious cash.
6. Pay credit card bills early – The way credit card companies make money is on the interest (and penalties) they can charge you. The way you can save money, then, is to minimize your interest (and avoid penalties) as much as possible. One way to do this is to pay attention to how your credit card calculates the average daily balance, which is what they use to determine your interest. A lower average daily balance translates to a smaller interest charge, so keeping it low is A Good Thing. Make payments earlier, and charge things later, is the short answer to doing this.
7. Off-peak is your friend – Airfares are more expensive if you travel on the weekend, but change your flight one day either way and you can see substantial savings. This is an example of leveraging the discounts companies can offer for using their services during off-peak hours. (For corporations, electricity during peak hours costs more than off-peak hours.) Another example is movies; when new movies come out on Fridays, we typically go to a Saturday matinee instead. It’s the same movie, but it’s not as crowded and the tickets are 20-25% cheaper. Look for other examples of off-peak discounts to help save you money.

Sometimes, the best way to save money is to not spend it. When you do have to spend it, though, these tips can help you get our of debt just a little bit more quickly.

Filed under:
Credit Card Debt by pigo