Get Debt Free By Getting Rid Of Bills You Do NOT NEED

One of the easiest and most effective ways of Getting Debt Free is to eliminate excess expenditures. To do this you MUST be honest with yourself, you MUST be willing to stop "keeping up with the Jones's" and you MUST persevere. We are going to continue using the example budget illustrated in our first blog "Get Debt Free by Creating and Following a Budget" to show how we can trim the fat from our budget. For reference, here it is:

Rent/Mortgage - $1000
Auto Insurance - $120
Auto Loan - $400
Auto Loan #2 - $300
Life Insurance - $65
Water - $40
Electricity - $80
Garbage - $20
Natural Gas - $120
Childcare - $500+
Gasoline - $300
Groceries - $1000
Telephone - $40
Cable - $50
Internet - $50
Cell Phone - $100
Credit Card - $100
Student Loans - $100+
Total - $4385++

Looking at the budget above you SHOULD be able to spot at least 3 items that can go without even a second thought. I see even more. Cutting out the cable, the internet, and any cell phones are an extremely easy way to pocket an extra $200+ per month. I know what you're thinking, "how am I going to survive without these things?" It is pretty simple really, and all you have to do is ask anyone who was alive about 10 years ago to find out that it is not only possible, but you might actually grow to prefer it. The next two items are BIG, and for a lot of people they are even harder to deal with. The cars MUST go. If you are serious about getting debt free you MUST cut out the auto loans. These are DEBT, and in this example it's zapping your wallet of $700 a month. At least 80% of that is going to be gone when that loan is paid off in the form of INTEREST and DEPRECIATION. New cars are the single biggest difference you can make in transforming your finances. Get rid of them. For intelligent people the sweet spot is going to be a $4,000 to $6,000 car. If you are driving a new car you paid this much in down payments and taxes before you even drove it off the lot, so don't make the excuse that you can't come up with $4,000 to drive a decent running car.

Now that we've trimmed some major debt saving fat off the budget in this example, we've managed to save about $900 per MONTH!! Now we can start paying that extra $900 a month to our credit cards and student loans to get out of debt that much faster.