Debt consolidation

Decrease Your Expenses

• Start small by reducing or eliminating one new expense every month or two
• Eliminate or reduce expenses that are wants and desires versus needs
• Think twice before spending or purchasing items that do not help you reach your financial recovery goals
• Plan and save for certain items rather than using your credit card

Scenario

Dedra and her husband, Leon, had always lived within their means. Then their world was turned upside down when Leon passed away. A year later, Dedra is still struggling with the loss of her husband, large medical bills, and the need to provide for her children. While she received some life insurance money, she cannot maintain their previous lifestyle, and she has some difficult decisions to make.

She has been watching her spending and thinking of ways she can cut expenses or save money. For instance, going out to eat is now a special treat rather than a regular occurrence. Dedra cooks more and has started making grocery lists and menus based on sale items to save money. She has also eliminated extra telephone services (e.g., caller ID and call waiting), and reduced her cable and Internet service plans.

If Dedra is tempted to buy something, she considers whether the purchase is a “want” or a “need,” how it fits into her financial goals, and whether the purchase will impact those goals. If Dedra determines she or her children really need something, she no longer goes straight to the store to purchase it. She shops at thrift and consignment stores, yard sales, or goes online to find the cheapest deal.