to your home (many are happy to oblige because it cuts down on their costs). Both efforts will save you time in the long run and quite possibly save you money, too.
116. D ON ’T U PGRADE Y OUR L IVING S PACE TO H OUSE M ORE S TUFF
One of the biggest reasons that people consider upgrading their home is that they simply don’t have room for all of their stuff. That’s the single worst reason to lay out a huge amount of money for a space upgrade you don’t actually need. If you’re considering upgrading because your stuff is starting to fill up all of your space, take a hard look at that stuff around you and ask yourself how much of it you really need. Then, instead of shelling out a lot of money for bigger housing, put some money in your pocket by getting rid of that unwanted stuff using the tips in this chapter. The less junk you have, the less space you need to live, and the less your housing bill will be.
117. F IND Y OUR M OTIVATION
Bad spending habits, the kind that result in ever-increasing debt and credit card problems, are usually the child of a bad routine. Humans are beings of habit. We fall into certain routines and it takes a powerful force to knock us out of that routine. To break the habit of consistently overspending and putting things on credit, you need to find that powerful force that motivates you to change. Whenever you go to use the plastic or take out more debt, think about that motivator. Some suggestions: your children (and their future), your dream home, the ability to retire and still have some time to enjoy active life, the shame of having to declare bankruptcy, or the ability to quit your job and chase the career of your dreams. Find that one thing that you want so badly that it hurts, then recall it every time you pull out the plastic. A great tip: Glue a picture of that motivation to the front of all of your credit cards, so you have to see it each time you head to the checkout.
118. K NOW W HAT Y OU O WE
The first step is to get a grip on your total financial situation. Create a master list of every debt you have, including the total balance on that debt and the interest rate you’re being charged. List everything, including credit card debts, student loans, mortgages, car loans, furniture loans, and personal loans. You need to get a complete picture of what you owe before you can start getting rid of your debt. Remember, every dollar you pay in finance charges or interest is a dollar lost. To truly live cheap means to pay no finance charges or interest at all.
119. C ONSOLIDATE OR R EFINANCE A NY D EBTS
Are there any debts on that list that you may be able to consolidate with others at a lower interest rate? Outstanding student loans are usually a good place to start looking, as consolidation can sometimes significantly reduce your overall interest rate and lower your monthly payment. You may also be able to refinance your home mortgage to a lower rate (if you can lower your rate more than 1 percent in the first five years of your mortgage, it’s well worth it), or consolidate many of your high-interest credit card debts into a home equity line of credit. You may even want to look at transferring credit card balances to new cards with a 0 percent balance transfer offer. Your goal should always be to move the highest interest rate debts first; the bigger the gap between your old interest rate and your new interest rate, the better. Remember, though, these are solutions to make repaying your debt easier, not a tool with which to get more easy credit to charge up those cards even higher.
120. V ISIT Y OUR L OCAL C REDIT U NION
If you don’t know where to begin, the place to start is your local credit union. Explain your situation in detail and tell them that you’re seeking to move your high-interest debt to something with a lower rate. Credit unions often have many options available and typically have the strongest rates in your local area, plus they often provide free financial
116. D ON ’T U PGRADE Y OUR L IVING S PACE TO H OUSE M ORE S TUFF
One of the biggest reasons that people consider upgrading their home is that they simply don’t have room for all of their stuff. That’s the single worst reason to lay out a huge amount of money for a space upgrade you don’t actually need. If you’re considering upgrading because your stuff is starting to fill up all of your space, take a hard look at that stuff around you and ask yourself how much of it you really need. Then, instead of shelling out a lot of money for bigger housing, put some money in your pocket by getting rid of that unwanted stuff using the tips in this chapter. The less junk you have, the less space you need to live, and the less your housing bill will be.
117. F IND Y OUR M OTIVATION
Bad spending habits, the kind that result in ever-increasing debt and credit card problems, are usually the child of a bad routine. Humans are beings of habit. We fall into certain routines and it takes a powerful force to knock us out of that routine. To break the habit of consistently overspending and putting things on credit, you need to find that powerful force that motivates you to change. Whenever you go to use the plastic or take out more debt, think about that motivator. Some suggestions: your children (and their future), your dream home, the ability to retire and still have some time to enjoy active life, the shame of having to declare bankruptcy, or the ability to quit your job and chase the career of your dreams. Find that one thing that you want so badly that it hurts, then recall it every time you pull out the plastic. A great tip: Glue a picture of that motivation to the front of all of your credit cards, so you have to see it each time you head to the checkout.
118. K NOW W HAT Y OU O WE
The first step is to get a grip on your total financial situation. Create a master list of every debt you have, including the total balance on that debt and the interest rate you’re being charged. List everything, including credit card debts, student loans, mortgages, car loans, furniture loans, and personal loans. You need to get a complete picture of what you owe before you can start getting rid of your debt. Remember, every dollar you pay in finance charges or interest is a dollar lost. To truly live cheap means to pay no finance charges or interest at all.
119. C ONSOLIDATE OR R EFINANCE A NY D EBTS
Are there any debts on that list that you may be able to consolidate with others at a lower interest rate? Outstanding student loans are usually a good place to start looking, as consolidation can sometimes significantly reduce your overall interest rate and lower your monthly payment. You may also be able to refinance your home mortgage to a lower rate (if you can lower your rate more than 1 percent in the first five years of your mortgage, it’s well worth it), or consolidate many of your high-interest credit card debts into a home equity line of credit. You may even want to look at transferring credit card balances to new cards with a 0 percent balance transfer offer. Your goal should always be to move the highest interest rate debts first; the bigger the gap between your old interest rate and your new interest rate, the better. Remember, though, these are solutions to make repaying your debt easier, not a tool with which to get more easy credit to charge up those cards even higher.
120. V ISIT Y OUR L OCAL C REDIT U NION
If you don’t know where to begin, the place to start is your local credit union. Explain your situation in detail and tell them that you’re seeking to move your high-interest debt to something with a lower rate. Credit unions often have many options available and typically have the strongest rates in your local area, plus they often provide free financial
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