Nowadays, people have a much wealthier life than in the past. However, credit cards, student loans, mortgages, car loans, and other personal loans are debts that anyone may be facing to meet our families' needs because not everyone can afford all finance payments. A study in 2018 showed that the average Americans carried $ 38,000 in Debt; the debt ratio increased from 23% in 2017 to 27% in 2018. In fact, more than half of Americans spend more than they earn every month.
That is understandable because when you live in a consumerist lifestyle environment like the United States, you are eventually caught in a debt spiral without knowing. Besides, the US's expenses are also more expensive, and the personal income tax is even higher than in other countries in the world. However, the reality is that US citizens are spending too much money on unnecessary things like buying luxury brand clothes, buying brand new cars, buying unique house decorations, eating in expensive restaurants, and other costly expenses. If you try to live in a minimalist style, you may be able to control your spending and reduce the debt burden on yourself and your family.
Source: https://www.entrepreneur.com/article/316048
Minimalist practices help you save money by practicing value-based spending and avoiding purchases. It also saves you money because you no longer want to buy something new when you get paid. This reduces some of the pressure to pay off excessive debts.
Let us find out 6 Ways to Get Rid of Debt by minimalism lifestyle
Make the budget and Stick with it
Source: https://www.workflowmax.com/blog/small-business-9-tips-for-creating-an-effective-budget
To avoid increased Debt, put brakes on unnecessary spending. Knowing what you need to spend each month will help you make responsible spending decisions. You can write down your monthly budget for each expense. A simple rule for expense management is rule 50/20/30. Accordingly, 50% of your income is used for essential living expenses such as food, accommodation, transportation, and utility bills. 20% of your income will be used for savings, risk provisioning, and debt repayment. The remaining 30% is used for personal expenses such as travel, entertainment, and shopping.
Save after you get your salary
Source: https://www.valueresearchonline.com/stories/47392/saving-is-just-not-enough-start-investing
Spend the rest after saving; do not keep the rest after spending. Once you have decided on your monthly target savings, all you need to do is to save this money as soon as you have income. Of course, bank savings are the most appropriate option if you want to optimize your spending and avoid over-using your target savings. Not only do you cut back on spending, but you also get interested in the money you save. Many people wonder if they have to deposit a large amount of money at a time, but the interest rate is not high. But please do not worry, the currency will depreciate over time. However, even if the savings are not small but increases regularly and accumulates over time, it is also possible to generate unexpected profits. The important thing is you will not spend this amount of money until the expiration date. After that, you can do a lot of things with your money.
Hold a clothing swap with your siblings or friends
Clothing is one of the most significant wastes of money that I see. It gives you temporary but not lasting satisfaction. You can hold an exchange with your siblings or friends. Pick one day of the week, pack those you want to exchange, and give it to your siblings or friends, and they will do the same thing. It is even better if they have the same style as yours. But if not, you can experience an incredible feeling with a new fresh style of dressing.
Plan your meals
Source: https://www.cdc.gov/diabetes/managing/eat-well/meal-plan-method.html
People waste an unreasonable amount of money on food and alcohol. You likely throw away hundreds or thousands of dollars of foods annually when you leave uneaten food and unused products before eating them. Make a list of what is in your fridge and make a list of cookable items based on available foods. If you do not have time, you can go to the market once a week. However, to ensure that your food does not expire or reduce its quality, you should go to the market every 2 days. Make sure you only buy what you need for the meal, not too much for one if you do not want your food spoiled. The last tip for you: when buying food, you should mark the date of purchase and expiration date to know which food you need to cook immediately before it expires.
Earn more money with a part-time job
With the current situation of the Covid-19 epidemic, your financial problems must be facing many difficulties, such as salary cuts and bonuses. Because most work takes place at home, you can try to apply for a part-time job to increase your income.
Negotiate the interest rate on your credit card and other bills
If your credit interest rate is high, you feel it is almost impossible to pay interest. It is worth calling your card issuer to negotiate. Believe it or not, if asking for lower interest rates is quite common. And if you have a good or excellent credit score, you are likely to receive lower rates.
Drop expensive habits
When you're doing all of these things and are still in Debt, you're probably spending too much on extravagant spending. Stop going to bars to drink luxury alcohol. Stop eating at 5-star restaurants. Try quitting smoking habits too because it is also wasteful spending and a bad habit. You should buy food to prepare and cook at home. It would be better for you and your wallet.
Work cited:
Leonhardt, Megan. "Here's How Much Debt Americans Have at Every Age." CNBC, CNBC, 20 Aug. 2018, www.cnbc.com/2018/08/20/how-much-debt-americans-have-at-every-age.html.
About ChoncéChonce is a personal finance blogger and freelance writer who enjoys sharing debt stories (as she and her husband work their way out of $40, et al. "5 Ways to Embrace Minimalism When You Have A Lot of Stuff." My Debt Epiphany, 6 Sept. 2016, mydebtepiphany.com/5-ways-embrace-minimalism-lots-stuff/.
Latest from Trent Investing Is Not a Video Game, and Latest from Trent. "11 Ways to Get Out of Debt Faster." The Simple Dollar, 15 May, 2020, www.thesimpledollar.com/credit/manage-debt/11-ways-to-get-out-of-debt-faster/.
"5 Ways to Get Rid of Debt: Manulife Plan & Learn." 5 Ways to Get Rid of Debt | Manulife Plan & Learn, www.manulife.ca/personal/plan-and-learn/healthy-finances/saving/five-ways-to-get-rid-of-debt.html.
About ChoncéChonce is a personal finance blogger and freelance writer who enjoys sharing debt stories (as she and her husband work their way out of $40, et al. "5 Ways to Embrace Minimalism When You Have A Lot of Stuff." My Debt Epiphany, 6 Sept. 2016, mydebtepiphany.com/5-ways-embrace-minimalism-lots-stuff/.
Llc, Earnest Operations. "7 Things to Borrow from Minimalism to Get Out of Debt Faster: Earnest." Earnest Blog - Money Advice for Young Professionals, EARNEST OPERATIONS LLC, 19 Mar. 2020, www.earnest.com/blog/minimalism-to-get-out-of-debt-faster/.
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