Say Goodbye to Debt

Say Goodbye to Debt

By: EDILYN M. PARUGRUG
Mobile Teacher III, ALS

Is your Expenses greater than Your Income?

Is your income not enough to cover all your expenses? Are you thinking on how to have a part-time job? Are you buying some cookies, perfumes, jewelries, RTW clothes and selling them at the office? Preparing to hold a garage sale? Looking for government benefits that you qualify for? Are you tired of thinking lots of ways to earn extra money?

If your income is not enough to cover all your everyday expenditure, you are doing something to increase income or you either cut your expenses to increase your earnings. You'll find that it's typically easier to cut expenses than to increase income. You don't need to make drastic changes, but you must make some effective cuts that will allow you to pay your bills and save more for rainy days.
First, you must save for the bills you have to pay (mortgage, utilities, loan payments, credit card) and money for necessities (food, clothing, insurance). You can now focus on non-essentials - areas where you can afford to cut back Citybank-Philippines* shares simple ways to cut expenses.

• If you visit restaurants and order takeout often, consider bringing lunch from home and saving restaurants for special occasions.
  
  
• You can even reduce a "fixed" expense such as your electric bill by conserving energy. Turn off the air-conditioning one hour earlier than usual. Iron your clothes at the same time. Make sure all lights are turned off when you leave a room. Switch to small screw-in fluorescent bulbs which last at least five times longer than incandescent bulbs and use only about 40% as much electricity. If you add up how many bulbs you have in your home, that savings becomes significant.
  
  
• A regular meal of coffee and rice toppings at a fast food outlet every morning can cost around P100 per workday. That's nearly P24,000 per year. If you're married and your spouse has the same habit, that's almost P48,000 per year.
  
  
• If you smoke, think about giving it up. Besides the health benefits, you could save at least P10,000 per year by quitting a pack-a-day habit.
  
  
• Are you paying for cable and internet subscription plans that you hardly use? If you only watch a few channels on cable every night, see if your cable company can give you a lower priced plan. Also, if you don't get to log on often, consider switching to prepaid dial-up subscription, which you only pay for when needed.

Once your monthly spending is under control, you can think about some ways to make debt a thing of the past. Here's a list of ideas.

• Each month, try to reduce your usual spending category by 5 to 10%.  Refrain from being impulsive buyer.
  
  
• Always track your spending and income to make sure you don't get into debt again. Do not spend more money than you make. Debt was made possible by spending money you don't have or money you are yet to earn.
  
  
• Try to increase your income. Can you improve your salary? Is a second job possible? Can you sell something you no longer need?
  
  
• Pay bills on time to avoid late fees.
  
  
• Pay more than the minimum on your credit cards or loans.
  
  
• Stop creating more debt. Don’t use debt to pay off debt.
  
  
• Read your bank statement regularly. Remind yourself you need to save for your future.
  
  
• Build an emergency fund of at least three months' living expenses.
  
  
• Follow a monthly budget. Keep your spending within your monthly income.
  
  
• Shop around for the best product with low rates. You should use cash to make everyday purchases.
  
  
• Reward yourself. Working your way out of debt is a long, hard task. It's also a big accomplishment. Find inexpensive ways to celebrate your progress.

Over spending and getting out of debt is not easy. It takes a lot of time and willpower to do so. Most people need a year or two to escape from it. Better involve your family in all plans. But you can do it if you are really determined. Remember, the discipline and techniques you learn by solving your problems will benefit you for the rest of your life. The more you know about spending your money, the better equipped you'll be to secure a healthy financial future.

As saying goes “Getting out of debt feels good, but staying out feels even better.”
*For more details, log on to www.usecreditwisely.citybank.com.ph.

EDILYN MAGBITANG – PARUGRUG (32 y/o)
Mobile Teacher III – Alternative Learning System (ALS)
Department of Education
Division of City Schools
Science City of Muñoz, Nueva Ecija