How Living Within Your Means Can Make Life More Enjoyable


With the recent downturn in the economy, many people are realizing that they cannot afford to sustain the lifestyle that they have grown accustomed to living. Fortunately, this does not mean life cannot be enjoyable. There are a number of easy ways to live within your means without hurting your quality of life. With a little planning and knowledge you can live on budget without feeling the financial strain.

The following are a number of ways to live within your means while making life more enjoyable:

1. In order to live within your means, you have to be able to bring in more money than you are spending. Create a monthly budget that includes how much you spend on essential items such as home and vehicle insurance, utilities, food, cable, phone, mortgage payments, gas, etc. Then, calculate how much you earn monthly. Subtract your monthly income from necessary expenses to determine how much extra money you have to work with.

2. List extra expenses such as entertainment, recreation, and products you shop for in the home and on yourself such as clothing, personal care products, etc. Calculate how much you spend monthly on these items. You will then need to come up with ways to control your spending habits. This can include cutting down on the number of times you dine out each month, shopping for discounts at large department stores, second hand stores, surplus stores, etc. When shopping, look for deals, coupons, and sales. Never pay full price for an item. As well, you can often find great deals when shopping online.

3. Credit card debt is a major source of financial hardship. If you have several credit cards with high outstanding debt, you should at least pay the monthly minimum for each card, and then start to pay off the card with the highest interest rate. Owning fewer credit cards will make it easier to manage and remember. Always pay your bills on time to avoid having to pay any interest at all. To help wean yourself off of credit cards, start carrying cash with you at all times and pay using cash. Seeing the physical money literally change hands will help you consider needs vs. wants on a more regular basis.

4. If you are having trouble keeping up with debt payments, then maybe you should consider consolidating your debt in order to manage it better. Instead of making multiple monthly payments to several creditors, you can consolidate your debt and only need to make a single monthly payment. In addition to helping you get organized, this can also alleviate stress that is often associated with debt.

5. Clean up your credit score. Request a copy of your credit report from one of the following two major credit bureaus: Equifax, or TransUnion. Check it over for any inaccuracies. Look to see what debt is affecting your credit rating and work with a creditor to establish a repayment plan. Don’t ignore your creditors as they will send your debt to a collection agency.

At first, implementing a plan to live within your means can seem very unpleasant. You may miss a few of the luxuries you had grown accustomed to. However, once you get used to the plan, you will find life more enjoyable as you will not longer have the worry of how you are going to pay all of your bills. You may even realize that you are much happier living on a budget.

Adriana Noton is a freelance writer who specializes in providing great financial information for Canadians. When searching online for debt counselling or credit counselling, one of the many resources available is Consolidated Credit; offering a variety of debt counselling services and financial planning tools to help Canadians get their debts under control.

Debt Counselling FAQ:

Question: How to Utilize Christian Debt Counseling?
Can somebody please explain me how to utilize debt counseling?

Answer: They offer consolidation services that help you reduce your interest rate and monthly payment on some of your cards. They charge a monthly service fee when you enroll, and are also paid by your creditors. There are pros and cons to their service like any other debt services out there. There are other debt options out there, and to really get out of debt, you have to make sure you choose a solution that tailors to your needs. The main options out there are consolidation, settlement, and bankruptcy. All of them work, but they do not work for all. Its very important you understand each one from an un-bias source. Typically each company that offers one of those services will only praise their solution and degrade the others.

Question: What are the advantages and disadvantages of debt consolidation?
What is the best debt Counseling and debt consolidation services? Are there any debt or credit card consolidation services that are easy to use and secure and worth the time?

Answer: Debt consolidation can be good if you can get your interest rate below your other cards, which is often feasible since the balance will be higher, then they usually give you a lower rate. It’s never a good idea if you have to pay ANY consolidation fee or have to pay a higher rate.

You need to first examine and change how you manage your debt in particular and your personal finances in general. The biggest challenge of debt refinancing is to not go out and load up with more consumer debt because you have new room in your budget.

Question: I need suggestions on the best debt counseling services available, free or fee based.?
Before I have to file for bankruptcy or the bank forecloses on my home I would like to explore other options available.

Answer: Some options are:

Buy Dave Ramsey’s book, Total Money Makeover. Go through the Financial Peace University (you can go through it online now). It is a great tool for planning your way out of debt and to better habits for the future.

If you are working, chances are your company has some kind of an EAP program (Employees Assistance Program) for help with life’s problems. Mostly they refer people to counseling, but that can include debt counseling services. Whatever debt counseling program they refer you to will be a reputable one, and your benefits plan may cover any costs.

Check with a NFCC credit counseling service. These are legit, non-profit companies offering debt management programs for a nominal fee.

Question: How Does Consumer Credit Counseling or Debt Affect Credit Rating?
I need to know how actually consumer credit counseling actually affect my credit rating.

Answer: Your credit score is affected by two things. Your payments and your debt to income ratio. So, if you have never been late on anything but your debt keeps increasing, then eventually your scroll will start dropping. Many people are so worried about their credit score and would rather drown in debt than have their score affected. This is why many people are against any debt solutions out there. Its like wondering why would any one have a perfect lawn, but the house on it not be live able. There are many debt programs out there that can help get rid of debt, but there are also many scams out there as well. Each as its pros and cons, and honestly not all affect your score. Some actually may help it in the long run. All the debt solutions out there work, but they DO NOT work for all. Meaning, you have to find a solution that is tailored to your circumstances and debt needs.

Question: What does debt relief companies do for me?
Can debt relief services affect my credit if I use them to lower my interest rate?

Answer: Yes they can negatively impact your credit.

Question: Does Chase, Bank of America, and Capital One give credit debt counseling/budgeting?
Like, advice on how to eliminate debt. If so, which ones and is it free?

Answer: I would just call and ask them. Almost all banks can offer debt consolidation if the client qualifies, which is one way to lower those rates and clear that debt.

Question: Where is the best place to go for individual debt counselling?

Answer: I have found that there are a few ways to get help, the CCCS seem a very good company as it is free and they don’t make false promises, national debt line have a good, informative website and your local CAB will help you budget as well.

Question: Can you explain the difference between a Credit Card Debt Relief program and Credit Counseling?
I’m trying to figure out which route to take with my financial situation. Are there any other options for a person who is still current with all payments but on the verge of possible financial ruin?

Answer: With Credit counseling, the credit counseling company works with your creditors to have your interest rates lowered so you can pay off your debt faster. You normally will make one payment to the company and they will distribute it to all your creditors. Usually takes 4-7 years to become debt free.

The Negative to credit counseling is that while your credit score itself will usually not be negatively effected by enrolling in a credit counseling program, your ability to establish new credit, or any use of existing credit for that matter, will be abolished. Throughout the duration of the program, it is unlikely that you will be able to qualify for a home loan, car loan, or any other credit.It is hard to get a loan or credit card during this period. Also, although interest rates are usually (but not always) lowered for consumers in credit counseling programs, the monthly payments typically will stay the same as your minimum payments, and sometimes more. That means, for consumers that are truly struggling or unable to make their minimum monthly credit card payments, this option will not provide cash flow relief.

With Debt Relief, the debt settlement company can help people that are truly struggling with credit card debt, by representing them in negotiations with creditors to secure settlements of anywhere between 40-60% of the amount of debt owed (at time of enrollment). Of the debt relief options, debt settlement is the least expensive, and shortest in length, with most debt settlement programs averaging between 24-48 months in length.

The Negatives to debt relief include negative marks on your credit for up to seven years. Also, most creditors will report the forgiven debt as income and will send you a 1099c form. You have to report this as additional income on your taxes which would increase the amount of taxes you owe on your tax return.

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