Unfortunately, a large proportion of families find themselves in debt and unable to cover any emergency or unexpected bills that come their way. While the reasons for these situations may be due to unemployment or large medical expenses and the like, this is not always the case. Many families find themselves in debt and living paycheck-to-paycheck despite having large incomes. It is important for a family to have debt discipline in order to be able to manage their money successfully, get out of and stay out of debt. Changing your behavior can be difficult, but if you stick to your resolve and work together, it is possible to change your life.
Knowledge is power and you need to educate yourself in the area of finances in order to help you get on top of your money management. There are many blog posts and personal finance pages online that can help give you other perspectives of how to manage your finances. You may be able to find free courses in money management where you will get free advice from professionals. These are often run by banks or Credit Unions and can be found on their websites. Even an objective third party, such as a family member you can trust, can help you if you sit down with them. Finding out all your options is the first step in finding the ones that will work for you.
Do Not Accumulate More Debt
This may sound like a no-brainer if you are trying to get out of debt, but for many people, it is very difficult. But, if you want to start getting out of debt, you need to stop taking on more debt immediately. This includes credit card debt. If the situation is serious, you can even go as far as cutting up your credit cards and using only cash.
Most people would be surprised to find that they can actually cut their expenses even if they think they can’t. You may be living paycheck-to-paycheck, but there are always expenses that can go. The first step in this is to carefully list all of your expenses from the most important to the least important. Don’t leave anything off – include the take out coffee you buy each morning, the subscription for the magazine you never read and the chocolate you buy at the checkout. This will help you see where your money is going and what you can cut off this list. You may be surprised how much the unnecessary expenses add up to over the month.
Increase Your Income
Budgeting and saving all rests on your income vs your expenses. Once you have cut down your expenses as much as possible, you can look to increase your income. This may sound difficult, but there are many part-time jobs or casual jobs available that may be suitable for all members of the family. Perhaps the kids can take on babysitting, dog walking or car washing in order to create their own spending money so the family budget does not need to cover that. Perhaps the parents can take on odd jobs or work overtimes to bring in more money. If you combine increasing your income with decreasing your expenses, you can save a respectable amount each month.
It is important to involve the whole family in budgeting as debt discipline is something that can be learned from a young age and can be implemented by everyone in the family. Getting out of debt may be a slow and difficult process, but it is possible, particularly if everyone in the family gets involved.