Someone once said that life ceases to be enjoyable if it is founded on constant debt and borrowing. We are usually the architects of our suffering when it comes to debt, sometimes even subconsciously. Budgeting takes sacrifice. It takes time and commitment. It can also feel like a self-imposed punishment if you don’t think about the long-term goals.
These long-term goals can include things like financial independence, freedom from debt, and the ability to accomplish things that were previously unattainable because of debt. I don’t own credit cards anymore and I used to be so mired in debt that I couldn’t see a way out. Most Americans are drowning in debt. Americans collectively owe over $1.3 trillion in debt.
The average family has over $16,000 in credit card debt. Homeowners on the average maintain over $173,000 in mortgage debt. Own a car? The average car loan is over $30,000. Large scale debt is bad enough to deal with, but hard to get through life without accruing. Still, it’s the small debts we rack up without noticing that sometimes causes the most problems.
Cutting out the little things and differentiating between need and want are surefire ways to cut down on debt. It can help you save about ,000 annually.
Partial Payment Credit Card Interest Penalties
The worst thing about credit card debt is not paying outstanding balances in full. Most credit cards carry an average interest fee of 17.61%, or more. Don’t use your card if you can’t pay the bill, and if you do, pay it off in full until the debt is paid. You can save over $637 annually in interest penalties by doing so.
Exorbitant Bank Fees
There are many online banks that offer free checking and savings accounts with no monthly fees because they don’t maintain physical branches. Credit unions might also offer free or cheaper account maintenance fees. The average bank charges a monthly $12 maintenance fee. That’s over $144 annually!
Do You Really Need Premium Gas?
You are fine with regular gasoline unless your car specifically needs premium. Most Americans buy 660 gallons of gasoline every year. The price difference between premium and regular is about $0.60 per gallon. So, you can save about $400 annually sticking to regular.
Expensive Coffee
If you buy overpriced Starbucks coffee every day, you have no right complaining about debt. The average cup of Starbucks coffee is $3.15! That amounts to $1,150 annually! And that is just if you buy one cup per day. Drink at home or research the cheapest cup around. There is no excuse to pay hundreds of dollars a year on brand-name takeout coffee.
Assess Your Spending Habits
Do you need your expansive, expensive cable package? How about that gym membership that you never use? Do you buy a candy bar every day on the way home from work? You can save over $50 annually by refraining from buying tap water and buying a container to fill up at fountains. If you pay attention to the small details, you can do big things. Like cutting down on debt.
Read More
Can Debt Consolidation Help to Get You Out of Debt?
Money-Making on Demand: 10 Proven Ways to Offset Student Debt
Debt After Death and What It Will Cost Your Family
Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.