DIY Debt Management
- 1). Strive to live frugally. Clipping coupons and purchasing needed items while they are on sale only takes a few minutes each week before it becomes a habit. If you must purchase something, search for the best bargains online and in sales ads.
- 2). Set your family down for a meeting. Instruct them that you are going to start living in a way that will enable the entire family to learn to manage its money wisely. These habits will help each person to avoid unnecessary debts in the future. Small debts can quickly escalate into a deluge of money problems that fills your life with stress.
- 3). Create a family budget. Designate where every incoming dollar will go in the budget such as mortgage, food, utilities and more. Decide how much of the budget is spent on groceries, insurance, medications, cable, electricity and all the other expenses the household incurs. Give each person an allowance each week to spend on things that he feels he must have. Even if this is a small sum, it will teach him to save for a few weeks or months for something he really wants. This learning experience will teach him to be able to distinguish from spontaneous desires and spending and things that he is truly willing to save his money to obtain.
- 4). Strive to avoid using credit cards. Build up an emergency fund of at least $1,000 that will cover any unexpected crises. This will cut down on credit card usage when the car breaks down or other unexpected problems that occur and you can pay with cash instead. Buying something you feel you need at a bargain price isn't much of a bargain when you pay high interest rates from using the credit card. Make a commitment to buy luxury items only if you have saved the cash for them.