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Get Out Of Broke: Improving Your Finances For Good

Author: Candice Lines
Published: Jul 26 2012

Budgeting

It's easy to tell yourself that you must live within your means. It's another thing entirely to practice what your inner voice preaches and resist making the frivolous purchases and poor market decisions that collectively have dug you into debt. It won't be easy, but bringing your spending in line with your income and learning how to take advantage of a deal when you see it are both necessary evils. Read on to learn how to break free of your broke existence with as little pain as possible.

1. Get Out of Debt

Unless you're one of the lucky few who graduate debt-free or find a six-figure job straight out of college, financing your education left you in a serious financial hole. In 2011, the average graduating college student's debt load topped $25,000 for the first time, a scary sum in a very uncertain economy. It's not that you shouldn't go into debt to fund your education or even to buy a house, but draw the line there and use cash for everything else. In fact, stop using your credit cards now and pay them off in full at your earliest convenience.

2. Pay It Forward

The hardest part of saving for your future is dropping that first $25 or $50 in an account that, these days, earns next to no interest. Force yourself to ignore pressure to keep spending and make that first deposit instead. Then make another, and another, until you're saving 5 to 10 percent of each paycheck. In a world where the unexpected can strike at any time in the form of sudden unemployment, emergency-room bills, and car repairs, you'll appreciate the cushion.

3. Let the Joneses Pass

If you don't crave validation, you're not human. Unfortunately, Western society venerates folks who exude prosperity, whether genuine or manufactured, and plenty of industries encourage those who don't have it all to act like they do. In an earlier time, they called this arms race of appearances "keeping up with the Joneses," and it remains a great way to get yourself into serious debt. So pay no mind to that shiny new car in the neighbor's driveway, however much it may beckon.

4. Find Better Deals

Many service providers that charge by the month can get away with slowly raising their rates and including hidden or unexplained charges in each bill because they know you're unlikely to do anything about it. Prove them wrong and start looking for better deals on supposedly non-negotiable services like cell phone plans and auto insurance. When it comes to saving money, a little research goes a long way.

5. Shop Generic

When you buy more expensive big-name products, you're subsidizing the ad campaigns that make those names big. In certain industries, like cosmetics, recognizable products do tend to be held to higher quality standards than their generic alternatives. For basic food staples, store brands are usually just as good as their more expensive ad-supported counterparts.

Like most unhappy circumstances, being broke is a temporary condition. How temporary it is depends on how hard you're willing to work to end it, so get moving! Put the above tips into practice in combination with a set of manageable goals and you'll have your financial house back in order for good.

Candice Lines lives and writes in London. She writes for www.carinsurance.org.uk where you can find more information on car insurance, trips, and tips for saving money when you drive.

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