4 Tips to Avoid a Call from a Collection Agency

As darkness falls, the financial fears begin to nag you… one common fear that plagues many is of missed credit card payments and wrecking your credit score. The crunch of mounting debt and the fear of a call from a collection agency is enough to make it hard to get a good night’s sleep.

If you find it difficult to sleep because of debt problems, here are a few tips to help you reduce your debt load.

1) Get Rid of Cable

Reduce DebtMost people who are living beyond their means do not pause to consider how much they’re spending each year on things like cable TV. Typical cable bills run anywhere from $100 per month to more than $300. This adds up to between $1,200 and $3600 per year!  For some people, simply cutting cable is all it takes to eliminate some of their debts. If you still like to be able to watch your favorite shows or movies, streaming video sites like Hulu and Netflix are a much cheaper online alternative to overpriced cable television.

2) Cut Back on Eating Out

Another major waste of money is eating out at expensive restaurants multiple times per week. It may be a chore to have to cook for yourself, but eating at home will reduce meals to a fraction of the cost you might pay for a meal at a restaurant. And it’s not just expensive restaurants… just eating fast food for lunch each day (not counting any dinners) will add up to an obscene amount of money over the long term. If you cook your dinners at home you could easily bring essentially free leftovers to work the next day. Plus a Big Mac, Large Fries, Large Coke and Apple Pie has 1570 calories and 64 grams of fat (99% of the RDA). So, by bringing a sack lunch to work, you will be able to make nutritious meals that will help you maintain a healthy weight and potentially save you even more money on expensive doctor visits.

Assuming a typical fast food meal costs between $8.00 -$10.00 if you eat out 5 days a week you will spend $40 – $50 a week or about $2500 per year add to that another  $50-$100/week for just one restaurant dinner and you could easily double or triple that.

3) Eliminate Expensive Entertainment

Everyone likes to get out of the house, but constantly hitting the theater and other expensive hot spots adds to the mounting pile of monetary debt. For instance a first run movie for two with popcorn and drinks could easily cost $30 – $40. If this is a weekly date you’re easily spending $2000/year.  Consequently, it is generally smart to limit the number of times you head out to major venues. Spending time with family at home, reading a good book, or other types of free entertainment like going to the park and free community events are nice ways to cut back on some of the excessive entertainment spending which can cause you to go over budget.

4) Drop That Gym Membership

Another way to avoid the debt collection and credit card processors is to drop your monthly gym membership. The average gym membership can cost you anywhere from $10 per month to as much as $60 per month.  Plus, most gyms tack on an initiation fee that can range from $25 to $150. For most people, simply getting outside each day for a 30-minute walk, working out to a video at home, or cutting calories would suffice to help them drop pounds and keep fit. It is a situation where free alternatives exist, but people choose to willingly spend more than is necessary to obtain the results they could be getting at no cost. Preventing debt is really the best financial medicine in the process of reducing one’s debt load.

Small on-going monthly charges add up and its only a matter of time before you find yourself in financial trouble. So when looking to eliminate debt start by looking at the on-going monthly expenses first. In our examples we could conservatively save $2000 on cable, $5000 on restaurant food, $2000 on entertainment and $1500 on a Gym easily saving a total of  $10,500/ year. So all you have to do to get started is see which bills you pay every month and decide if you could live without them (or at least reduce them).

Learning to cut back and still live well while staying within your budget, is really the best way to eliminate your debt. Reducing your debt before things get too out of hand will also save money in excessive interest payments to the merchant account collection agencies. Living within budget may not be the most fun lifestyle, but it is certainly a financially sensible one. Plus it will allow you to sleep well at night and if you put your mind to it you can still enjoy life without spending a fortune.

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