Cut down your expenses and clear your debts

With the high costs of living nowadays, it is difficult to stay out of debt and very easy to fall into the debt trap without realizing it. Sometimes, without knowing it, you will find that you have fallen into deep debt with no debt solutions in sight. Your expenses kept piling up, your bills kept piling up and soon you will find that you are unable to pay for anything at all without starving to death. Sometimes, it would seem that your only solution out of this whole mess is by declaring bankruptcy.

Well, before you take that drastic route to settle your debt problems, why not take a few steps in cutting down your expenses and curbing your spending first? There is still a way out without needing to take such drastic actions or even going to debt management companies. It all really depends on how you handle your finances and the will power you need to keep a tighter rein on your money and spending habits. All you really need to do is to have a stricter control. You need to relook and give your spending habits a makeover, literally.

So, here are some tips on how to cut down expenses and clear your debts:

1. Be pennywise and compare prices
Although it sounds simple and something everyone tells you to do but you don't really pay it any heed at all. You probably think it does not make any difference if you save a dollar here and a dollar there but let me tell you, just by saving a dollar here and there, you could end up saving hundreds in a month. I am sure you can think of many other uses for the hundreds saved, right?

2. Set up an emergency rainy day fund
I know you will probably say your monthly income is barely enough to cover all the expenses and now you have to put some aside? Well, think of it as a compulsory bill you absolutely must pay. It is only by setting some small sum aside, it doesn't really matter how much, that you can be on your way towards a debt free life. Force yourself to put that money in an account you can't touch at all.

3. Less trips to the bars, more money to settle the debts
Yes, your social life is important but you could have a wonderful social life right at home! Why do you need to pay hundreds each month on drinks at bars just so you could keep in close touch with your buddies? It is far cheaper to get a six-pack and have a great time at home.

4. Cut out the unnecessary stuffs
Do you really need the latest playstation? Does it put food on your table, clothes on your back and a roof over your head? Do you really need to subscribe to the paid channel? Do you even need that nice new fashionable pair of shoes? Do you need that pack of cigarettes? Whatever your vices, this is a good time to go cold turkey and get rid of your bad habits. You don't need to smoke when it is literally burning up your money. You don't need that pair of shoes because you have dozens of perfectly good shoes in the closet. You don't need the paid channel because you don't even watch it all the time! Just keep the essentials, like food, clothes and the occassional movie to de-stress and that's all.

5. Set up a strict budget and keep to it
It is by budgeting that you will be able to keep within your spending limit. To ensure that you really keep to your budget, why not bring the amount your really need each day and keep the rest at home? This way, you will always be aware of how much you have in your wallet and with less tendency to overspend.

6. Cut your plastics and go cash
This may be the most difficult step yet but it is probably the best way to manage your debts and cut down your expenses. With the ease of credit cards gone, you will definitely stick to your budget!