By Julie Jaggernath
You might have seen or played a recent social media game known as #ThrowbackThursday (#TBT). It has become the nostalgic web trend of the year, letting you post pictures from “a while” ago so that you and your friends can enjoy reliving past events and laughing about good memories.
While fun for some, others would prefer to forget the past, especially if it included trouble paying off debt.
What Would a Financial “Throwback” Picture Reveal About Your Credit Card Balances?
Take a look at your credit card balances, or what you owe on your line of credit today. Now throwback, financially speaking, and ask yourself if the balances are higher, lower or about the same as they were 3 years ago.
What does your “throwback” reveal about your financial picture?
If you’ve paid debt down, congratulate yourself because that is a really tough thing to do. But, if you owe the same or more than you did 3 years ago, ask yourself if you’re ready to do something about it.
Related: How to refresh your financial picture & improve your credit
Update Your Budget to Avoid Spending More Than You Earn
Despite living modestly, trimming expenses and using a budget outline, many people don’t realize that they actually spend more than they earn. As life changes, so too must our spending, making budgeting a bit of a balancing act.
Making significant life-style changes and decreasing your spending is never easy, however struggling with debt year after year is even harder.
Here are three things you can do to get back in control of your money:
- Create and balance your personal budget
- Pay off debt
- Keep your spending in line with your income
1. Create a Household Budget – Track Expenses to Reveal the Truth
Review your overall household budget periodically and then discuss expenses, priorities and changes with all affected family members to help you keep on top of the fine balance between income and expenses.
It might be necessary for everyone to track their spending (again) to see where their money is actually going. You can use an app, an Excel spending tracker spreadsheet, or plain old pencil and paper. Keep it simple and easy for everyone.
Evaluate What You Learn from Tracking & Deal with What’s Throwing Your Budget Off Track
When you look at your tracking and spending details, you might quickly be able to see where your budget is out of balance. Or it might be a combination of things that are throwing your budget off track.
Either way, there are steps you can take to ensure that you regain your financial balance quickly, before your reliance on credit turns into a mountain of debt.
Where to Find Ideas to Decrease Expenses
Decreasing expenses is one way to work towards a balanced budget. There are plenty of tips online for living frugally, trimming household spending and saving money.
Check a few websites, sign up to get tips by email from newsletters and blogs you like, or follow sites through social media channels.
How Much Should You Be Spending on Household Expenses?
If you aren’t sure how much to spend on household expenses, try our one-of-a-kind Excel budget calculator spreadsheet. It will give you guidelines and tips as you fill in your income, expenses, savings and debt payments.
2. Pay Off Debt to Free Up Money in Your Budget
Consider selling assets that are either tied to debt or which can pay off debt fast. If you have car loans, determine if it makes sense to temporarily downsize your vehicle or find a less expensive vehicle to own. Sometimes just freeing up part of a monthly car payment is enough to give your budget some breathing room.
Related: How to Pay Off Debt Faster
3. Increase Income or Reduce Expenses – How to Decide What to Do
Increasing your overall household income works best when everyone also consciously reduces household expenses and personal spending. A budget and reduced debt payments will help.
If you have teens at home, get their input and ideas about saving on expenses around the house and earning their own spending money.
What to Watch Out For If You Look for Ways to Increase Your Income
As you investigate increasing your hours at work or taking on a part-time or second job, be conscious that you don’t take on more than you can reasonably do. You don’t want to consider options that will jeopardize your full time job or cause a stressful home life.
Look for ways to increase your income by doing things you like. If you can do yard work, accompany a senior for shopping, or give music lessons, hire out your services or take on a part-time job that lets you get paid for doing these things for others. You might be able to work a few hours a week in a craft or gardening store if these are hobbies you enjoy.
More ways to increase your income and keep yourself from spending more than you earn:
- It may be possible to rent out a room, the garage, or a parking spot.
- If you walk your dog, deliver newspapers or walk other dogs at the same time.
- If you like kids, offer some over-night daycare for shift workers.
- Apply to billet an international student or host home-stay students through your local school district or for regional sports teams.
Every little bit extra will help, so be open to creative solutions that add up!
“Throwback Thursday” – Can the Social Media Trend Motivate You to Pay Off Debt?
Paying off debt is much harder than accumulating it, so use #ThrowbackThursday to remind yourself of your goals. Focus on what you can do and how good it will feel to have paid your credit cards and debts off! Ask your social media friends to help you stay motivated and on track – or better yet, to join you!
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