We all know that money isn’t the key to happiness — even if it can contribute to travel and other life-changing experiences that help enrich our lives (which we recommend you partake in as often as possible). But the lack of money can certainly lead to soul-crushing depression. Knowing that your bank accounts are constantly in the red because you can’t afford to use cash to pay for things like groceries and school supplies? That can be even worse.
When taking out a loan, first make sure that repayment is something you can actually handle. Not only do you need a paying job, but the job security needs to be solid unless you can easily find another decent paying position.
Another thing to consider when taking out a loan is who’s offering it to you. Not every creditor was created equal — and anyone who has juggled Bank of America debt unsuccessfully will probably have a horror story about how the creditors kept them on the hook. Bank of America creditors are different because they don’t sell off the debt to third-parties in order to clear the books. They come after you themselves. And guess what? They can pay for some pretty hefty attorney’s fees.
If you don’t think you can pay for a loan (for a car or home or other big-ticket item), then think smaller. Do you really need a big piece of property? Maybe a smaller one will do. Maybe you don’t need a sports car. Maybe the off-grid tiny homesteading life is for you. Debt isn’t cool — but chickens are.
All joking aside, there are a number of ways to curb costs. The first is to actually go see a financial consultant. Your bank will almost certainly have one (because they want you to be able to pay your debts, especially when they made the loans). You’ll already have heard that you should find that one luxury item and get rid of it. Starbucks every morning? No. Make your coffee at home. The money adds up.
Here are a few more ways:
Make a shopping list after cutting coupons. And if the grocery store has an app for deeper discounts, download it. Use the coupons for new meal ideas instead of buying expensive ingredients you don’t need.
Know what your significant other is spending money on if you have a joint account. Not sure? Ask. No one can manage a joint account with only one party invested in saving money.
Keep in mind that the more credit you accrue, the worse your credit will become. It’s crucial to plan ahead to keep your bank account healthy, because worse credit means worse interest rates — and that means you pay even more and stay in debt even longer.
Download an app for budgeting. Most of these will provide you with a pie graph to display where you spend all your money — i.e. rent, fast food, groceries, online, etc. This can really help put into perspective what’s important and where you should be trying to spend less.