The cost of living has increased exponentially in the last few years. Prices of certain items have doubled, and many people have more than one job to make ends meet. You might be working more just to get by and feel that there is no end in sight to your financial struggles.
Bills are coming at you from all angles, and you don’t have enough money to breath ease. I used to be there, so I know what that feels like. I was drowning in debt, and lawyers called me daily, threatening me with blacklistings, garnishes and lawsuits. On some days, I spent an hour on the phone with them, making payment arrangements. I was stressed all the time, and I had no idea how to get out of the mess.
I used to have terrible headaches because I was worried about being sued, incurring more expenses for lawyers and having my name tarnished financially. Hairs on the back of my neck used to stand up when my phone rang. I dreaded talking to my creditors. That lasted for several years until I paid all of them.
Now, I’m debt-free, and I’ve got savings. How did I do it?
I Made a Plan
Everything begins with your thoughts. When you ask yourself for a solution, your brain begins to seek answers. I asked myself how I was going to overcome financial stress, and my brain came up with several suggestions.
Earn More
To extinguish a growing fire, you need a bigger extinguisher. In your case, that means a larger income to offset the increased cost of living.
At the peak of my financial stress, I was doing freelance writing for an American company. The pay wasn’t bad but definitely not enough to cover all my loan payments. I was also paid weekly, and I couldn’t wait for the money to come through so I could buy food. Okay, now that I think about it again, the pay was bad. I was definitely struggling financially.
After I finished my tasks for the day with the one client I had, I spent the rest of the day looking for other clients. Looking for more work became my part-time job. I was relentless at finding more work because I knew that a higher income would help me to cover all my expenses and enable me to begin paying my creditors. That would alleviate a lot of the stress I felt.
It took me about a month since starting my search to find a good-paying client. Suddenly, I was in a much better spot. Not only could I cover all my expenses and pay my creditors, I had money left over at the end of the month.
Two or so months later, I found another client. Instead of relying on one client for an income, I had three. And when the first client stopped giving me work, I wasn’t stressed about losing that income because I had two other income sources, which paid me better.
If you have a full-time job, you need to ask your employer for overtime. If that’s not feasible, get a part-time job. You can also look for a higher-paying full-time job, but that can take several months. You need an immediate solution, so also work a part-time job while you find a better-paying full-time job.
Work at night for a few hours or on weekends. I know it’s going to be exhausting. When I was in my early 20s, I worked a full-time office job and weekends at a music store. I was exhausted, but I managed to save a nice chuck of change.
Rather be tired and have money, then sick and tired, stressed and broke.
Reduce Your Expenses
It’s not good enough just to earn more money. If you’re a spender, you’ve conditioned yourself to spend, so you’re likely to spend the additional income. And that will leave you back at square one. You have to reduce your expenses so that you have excess money at the end of the month. The more money you have left over, the less stressed you’ll be.
There are certain expenses, such as your loan payments, that you may not be able to reduce. But you can reduce most of the other expenses, if not eliminate them altogether. Some of those expenses include video streaming services, gym memberships, eating out, buying clothes and taking vacations.
You can reduce your housing expense by renting out one of your rooms. Or if you’re a single person, you can rent a room instead of paying for a full apartment.
Here’s one that will shock many people to their core: Sell your car and use public transport instead. I know, I’ve offended you, right? Some people are so attached to their cars that their entire self image is based on the car they drive. That’s one of the reasons they take out vehicle finance. They want the status of driving a nice car.
If you want to know how much your car is costing you monthly, add the monthly payments, gas, insurance, maintenance and repairs, car washes and registration to get the total cost. Imagine not having all of those costs, how much money you will save.
Your goal should be to incur expenses only crucial to survival. That is housing, food, utilities and transportation. Everything else is a luxury item if you really think about it.
No More Debt
You don’t get out of a hole by digging it deeper. Don’t add expenses you can’t afford on a credit card. Even worse, don’t take out a personal loan or a home equity line of credit (HELOC) to fund them. Although you might feel temporary relief by using a financial institution’s money, remember that you have to pay it back. That is likely to compound your headaches.
The less debt you have, the more freedom you enjoy. Imagine having a fully-paid house and vehicle. Those are likely to be your biggest expenses. And not having them will leave you with a lot of money at month-end. But the way to pay off your debt faster is by having multiple streams of income and reducing your expenses.
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