Live Debt Free

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How To Get Out of Debt Depression

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Debt can be a heavy burden; for some, it can cause depression. However, if you are facing a mountain of debt that never seems to get any smaller and feeling overwhelmed to the point of discouragement, there are ways you can get out from under it while also improving your overall mood.

  • Start by listing everyone who expects money from you
  • Create a repayment plan. Even if the amount transferred to each account is small, establishing automatic payments will give you peace of mind. Not having to worry about missing payments will relieve some of the burdens
  • You may also wish to consider government-backed loan consolidation or deferment programs and private debt counseling services
  • Consider using extra money from overtime or side employment to pay down debts faster; seeing regular progress would likely raise one’s emotions by providing them hope for a future beyond debt servitude

There is nothing quite like being in control of one’s finances. Set goals and stay committed; you will reach the other side soon enough. Debt depression does not have to control your life.

Acknowledge That You Are In Debt and That It Is A Problem

Debt can be incredibly stressful, and the best way to start dealing with the strain it can cause is to accept that you are in debt and recognize it as a problem that needs solving.

Refusing to confront your debt issues or sweeping them under the rug will only lead to more stress and anxiety.

The sooner you face reality, the faster you can move forward and take control of your finances. Though it may not always be easy, acknowledging our debt is essential for getting back toward better financial and mental health.

Make a Budget

Making a budget can be overwhelming, but it is necessary to manage debt. It can help you identify which areas of spending need to be adjusted to use your available funds to pay off bills and reduce debt.

It takes work to create an effective budget, but if done correctly, it will provide a plan to follow and the motivation needed to reach your financial goals. If you do a lot of research, plan carefully, and stick to your budget, you will be on your way to becoming financially stable.

Cut Back on Your Spending

When it comes to getting out of debt, cutting back on spending is crucial. It may seem complicated and inconvenient initially, but the long-term rewards for your financial health will be worth it. To make this task manageable, focus on small changes that can significantly impact your life.

Try buying store brands instead of name brands when grocery shopping, ride-sharing, or using public transportation whenever possible, and cut down on eating out or going to the movies with friends. These user-friendly adjustments might not seem like much, but they can save you money in the long run and get you closer to debt-free.

Increase your Income

One of the best ways to get out of debt is to increase your income. While this may sound difficult, you can take a few simple steps to do it successfully.

First, consider getting a better paying job if one aligns with your skills and interests. Doing so will make a considerable dent in your debt and give you the freedom of financial independence. Secondly, consider starting a side hustle.

This could be anything from tutoring others in school subjects to blogging or selling homemade products online. You’ll have fun developing new skills while increasing your income with each task completed. Finally, look for other ways to bring in additional income, such as investing in the stock market or taking advantage of free money offers from credit card companies.

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Make a Plan for Repaying Your Debts

Once you have increased your income, the next step is to make a plan for paying off all of your debts. An intelligent approach is to tackle any debt with high-interest rates first and then gradually decrease the balance on the remaining debts. Alternatively, consider consolidating payments into one monthly payment if you want to simplify the process and reduce financial stress.

This strategy can help keep track of progress more effectively and ensure that each debt is paid off on time.

Before embarking on your repayment strategies, it is essential to research ways to use budgeting and other innovative financial strategies to inform your decisions. Keeping a payment schedule will motivate you, make you responsible, and lead you to a life without debt.

Stay Motivated

To stay motivated throughout the process of paying off your debts, make sure to remember why you are doing this. Keeping the end goal of being debt-free in mind is essential to staying determined to get there.

Celebrate every successful small step along the way, such as paying off a large credit card amount, that gets you closer to achieving financial freedom.

Sometimes, remembering how far you have come can provide enough motivation during those tricky moments when you feel like giving up. Staying focused and motivated on becoming debt-free is possible; just be sure to never lose sight of why it is so important and what it will mean for your long-term financial security.

Seek Professional Help if Necessary

If you feel that you are struggling to take control of your debt situation and put yourself in a better financial position, seeking assistance from a professional can help. A financial advisor or credit counselor can look at your situation and help you figure out what you can do.

They can draft a comprehensive plan to help you reduce debt, build savings, prioritize payments according to interest rates, and protect your credit score. With their expertise and guidance, you can learn about budgeting and money-saving strategies that work for short- and long-term goals.

Having a professional help you through this process can make you feel less stressed and give you more power to make smart financial decisions.

Wrapping Up

Debt depression is genuine, and it can be difficult to break out of its hold. The most important thing is to not just focus on the negative feelings but to start actively working towards a debt-free future. In addition, it can help to prioritize debts, starting with the highest interest rate first and then working down from there.

Creating a budget and tracking spending can help identify necessary changes to eliminate debt. In addition, setting small goals and celebrating even the most minor successes will help maintain motivation to reach larger goals along the way.

Finally, finding support from a friend or family member who is also interested in achieving financial freedom could provide both accountability and an emotional boost when things get rough. With understanding, dedication, and persistence, anyone can break out of debt depression and onto a happier path toward financial freedom.

Image Credit: [Doucefleur]

How to Make your Paycheck Last When You Are Paid Once a Month

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The main financial challenge for many people who are paid once a month is making their paycheck last the entire month and covering their expenses.

This can be tough, especially if you have debt or other financial obligations. However, there are some things that you can do to make your paycheck last the entire month. 

  • Make a budget
  • Save up an emergency fund 
  • Automate your savings 
  • Cut back on discretionary spending 

Making your paycheck last the entire month can be challenging, but it is possible if you are strategic.

Make a budget

The first step in creating a budget is knowing your income and expenses. To do this, track your spending for one month so that you have an accurate picture of where your money is going. Then, include everything from rent or mortgage payments to smaller items like coffee or impulse purchases. Once you have this information, you can begin creating your budget.

Tip: go through your past month’s bank statement to get an honest picture of what you spend your money on.

Once you know your income and expenses, you can start allocating your income to different spending categories. There is no one-size-fits-all solution here. The categories and percentages will vary based on your circumstances. However, some common categories include housing, transportation, food, entertainment, and savings. 

Once you have created your budget, it is essential to stick to it as closely as possible. Try setting up automatic transfers to ensure you always meet your financial goals.

And if you find yourself dipping into other categories more often than you would like, take a closer look at where your money is going and adjust accordingly.

Save up an emergency fund 

One of the main reasons why you need an emergency fund is to avoid going into debt. Unexpected expenses can be a financial strain, and if you do not have the money to cover them, you may be tempted to put them on a credit card.

This can lead to credit card debt, which can be difficult and expensive to pay off. By having an emergency fund, you can cover unexpected expenses without going into debt.

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Another reason you need an emergency fund is that it can help weather financial storms. If you lose your job or experience a decreased income, your emergency fund can help you make ends meet until you get back on your feet. An emergency fund gives you peace of mind knowing that you have a cushion in tough times. 

Ideally, you should save up enough money to cover six months of living expenses. This may seem like a lot, but it is essential to have a cushion for unforeseen circumstances. If you cannot save that much money immediately, do not worry! Instead, start with what you can and gradually increase your savings over time. 

Automate your savings 

When it comes to personal finance, one of the best pieces of advice is to “pay yourself first.” This means that before you spend any money on bills, food, or fun, you should put money into savings. The idea is that by making saving automatic, it becomes a priority, and you’re less likely to spend the money elsewhere. 

Another reason why automating your savings is a good idea is because it can help you avoid costly overdraft fees. Overdraft fees happen when you try to spend more money than you have in your account and typically cost around $35 each time they occur.

If you have an automated savings plan in place, you can transfer funds from your savings account to cover any unexpected expenses and avoid paying overdraft fees. 

Now that we have gone over why automating your savings is a good idea, let us discuss how to do it. If you have a steady paycheck coming in from an employer, the easiest way to automate your savings is to set up a direct deposit from your checking account into your savings account. This can usually be done through your employer’s payroll system. 

If you do not have a steady income or want more control over how much money goes into savings each month, you can manually set up recurring transfers from your checking account. Most banks allow customers to set up recurring transfers online or through their mobile app.

All you need is the name and routing number of the bank to which you want the money transferred. Once the transfers are set up, they will happen automatically, typically once per week or once per month. 

Cut back on discretionary spending 

If you find that you are struggling to make ends meet each month, cutting back on discretionary spending can be a helpful way to make your paycheck last longer. Discretionary spending includes things like eating out, shopping, and entertainment. By cutting back on these expenses, you can free up more money each month to put towards other financial goals like paying off debt or building up your savings account. 

The first step to cutting back on your spending is to track where your money is going. This means keeping a budget and understanding where your money is spent each month. Once you understand where your money is going, it will be easier to identify areas where you can cut back.

There are often cheaper alternatives to the things we want or need. For example, instead of going out to eat every week, try cooking at home more often.

Instead of seeing a movie in the theater every weekend, wait for it to come out on DVD or streaming service. There are usually cheaper ways to do the things we enjoy; we need to take the time to find them.

Conclusion

Making a budget is one of the most critical steps to improving financial health. A budget helps you to track your income and expenses, so you can see where your money is going. It also allows you to set spending priorities and make informed decisions about the best use of your resources.

One of the key components of a successful budget is an emergency fund. You set aside money for unexpected expenses, such as medical bills or car repairs. An emergency fund gives you peace of mind knowing that you have a cushion to fall back on if something goes wrong.

Another essential element of a budget is automating your savings. This means setting up automatic transfers from your checking account into a savings or investment account. This will help you to save money consistently, even when you do not feel like it.

Finally, cutting back on discretionary spending can free up funds for more important financial goals. Take a close look at your spending habits and see where you can cut back, such as eating out less or buying fewer clothes. Small changes in your spending habits can make a big difference in your financial picture.

Image Credit: [Getty Images Pro]

The Top 5 Apps That Will Negotiate Lower Bills For You

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We all want lower bills. Luckily, there is an app for that. Unfortunately, many people do not have time to figure out how to reduce their monthly bills. However, there are mobile apps out there that can help you negotiate and slash your bills each month.

Discover these popular services that can help you avoid overdraft fees and save you a lot of money on cable, subscriptions, memberships, and insurance.

Cutting expenses can take a lot of time, even with a budget. Whether you are financially secure or living paycheck to paycheck, it is wise to save money by avoiding overpayment.

The good news is that these typically free apps negotiate better rates with creditors and providers, cancel unused subscriptions, automate savings that can score discounted services, and leave more money in the bank.

1. Truebill

One of the top ways to automatically reduce your bills is to try out Truebill. This service lowers bills by canceling unwanted subscriptions and managing your spending. Truebill’s website says this service has saved consumers $100 million.

Here is how it works. When using Truebill, the platform syncs with your bank accounts and credit card to observe your monthly bills. You can also select bills that are no longer in use or subscriptions you do not want anymore. With all your bills in one place, this makes it easy for the system to monitor when your automatic payments come due.

Even better, if you live in an area with regulated energy and experience an internet or cable outage, Truebill can ask the company to apply a credit to your account. The platform will determine the lowest rates available if you live in a deregulated area.  

The platform offers users a big bonus because it allows them to upload their recurrent bills. Then, Truebill will negotiate directly with service providers and creditors to take the hassle off your hands and get you the best deal.

  • That is not all. Truebill gives you various tools to assist with budgeting, such as generating expense reports to track where your money is going and automating savings according to your financial goals.
  • Truebill has a free app for Apple and Android and a Premium service feature. Premium memberships cost around $3 to $12 per month, totaling up to $36 to $48 annually.

You commit to giving Truebill 40% of the savings they get for you. The platform will also provide additional tools, such as subscription canceling, bill negotiation, budgeting features, Smart Savings Plan, and concierge services to streamline your financial life.

2. Trim

Like Truebill, Trim manages your bills to help you save the most money.

For example, Trim cuts the fat from your monthly expenses by checking regular charges for any unwanted services you would prefer to cancel. It can also monitor your credit card and bank account transactions to see where you’re losing money.

Trim dazzles users with its ability to negotiate your phone, internet, and cable bills with your providers, saving you up to a staggering 30% on bills you would pay anyway. Remember that Trim will deduct 33% from whatever amount they save. So if you snag $100 in savings per year on your phone bill, the platform will take $33, while you get to keep $67.

With Trim Simple Savings, Trim helps you meet your savings goals by stashing cash away every week to meet your financial goals.

Not only is Trim’s service free of charge, unless you select the Premium option for $99 per year, but Trim lets you earn a 4% annual reward for the first $2,000 you save with them. You will earn around .001% interest on any additional savings.

After that, you gain .001% interest on anything saved over and above that amount.

3. Billfixers

This free app saves you money by cutting down on multiple expenses, including phone, internet, cable, satellite radio, satellite TV, home security, and small business service bills.

If Billfixers saves you money, they will deduct 50% of the annual savings total that they net you by charging your bank, credit card, or PayPal account for a portion each month.

Since Billfixers is free, it does not come with automated savings or subscription cancellation features. However, the good news is that you won’t have to worry about negotiating your recurrent bills anymore.  

4. Billshark

This popular money management platform helps keep more dollars in your pocket by getting you a better deal on your cell, cable, satellite TV, or home security system bills. According to their website, Billshark has a 90% success rate in getting creditors and service providers to drop their prices.

Kevin O’Leary from Shark Tank also recommends, like BillShark, negotiating all your regular bills.

Similar to Truebill, you can upload your bills to the app. That way, Billshark will run your potential savings through their system and then contact your provider to get your bill reduced. They also cancel unwanted subscriptions for a $9 fee.

While the app is free to sign up or create an online account, Billshark takes 40% of any savings from negotiating your bills.

5. Harvest

Harvest helps bring your savings home by protecting you from hefty overdrafts or bank fees. That is because Harvest monitors your overall financial picture and asks for refunds on fees for you. If they save you money, the app keeps 25% and leaves the other 75% in your account.

The platform also helps you review and monitor your regular spending. If there are any unnecessary payments that you want to cancel, Harvest will notify you.

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Overall, this tool helps you get refunds and gives you saving and spending tools that can help your hard work of budgeting and saving pay off.

Final Thoughts

These apps make it simple and easy to reduce regular monthly bills. Also, some of the apps offer paid services that give you more options for negotiating.

While you might save even more money negotiating directly with your service providers or credit card companies, these outside tools can automate the job for you.

If you cannot negotiate these money-saving measures on your own or prefer to avoid bill negotiation situations, these apps are a solution to the problem that can help you save hundreds or thousands of dollars on your bills every year.

Image credit: [Grki]