So, you have decided that you are going to become debt-free and are starting the journey. Now making that first step is amazing, now it is time to talk about tackling your outgoings head-on!
If you have never really sat down and looked at your outgoings, this first look can be daunting, overwhelming and I’ll be honest, I felt a little annoyed that we had so much money going out on debt. It was the one thing that really kicked it up a step for us when we did this step as it gave us a visual of just how much we had going out and why we were in the position we found ourselves.
Wherever you are on your journey, it is always a good time to get started as there is never a right or wrong time. For those just starting out, this post on why you need to Spring clean your finances is a great place to get you started and motivated.
I don’t find our debt-free journey easy at times, for me, it is too slow in places but we are trying to find the right balance between living now and working on our journey to debt free. If you are wondering where to start, this is a great place to tackle those outgoings!
Tackling your outgoings, step by step!
Write it all down –
Using a bank statement (I did one for a month from pay day to pay day) take note of what everything going out is. It is easier if you split it into categories, so for me, I did the following:
- Essentials – These are the ones that are non-negotiable so things such as rent/mortgage, council tax, water rates etc.
- Debt – Every debt is written down, this is one that can be a little daunting.
- Day to day – This section includes things such as our virgin tv, food bill, petrol etc. These are ones that are potentially flexible but not the first to be squeezed when cutting outgoings.
- Treats – In here, this is where I put things such as my Spotify Subscription and other subs/treats we may have.
Once you have it all down, it will be clearer to see just where your money really is going.
Time to trim down on the non-essentials –
This is probably where we fall down a little compared to other stories you may read.
We understand we need to get out of the situation we are in however we don’t want to live life completely on a shoestring. Is it going to slow down our process, of course, it is, but we would rather be happy than struggle our way through the journey. It is a little like eating healthy, cutting all the treats out completely usually makes me reach for the treats far sooner than if I had just cut back but not out completely.
When you have your complete list of outgoings, take time to go through them all and see first if you still need them and then if you are keeping them, can you get them at a cheaper rate? Things such as Disney Plus can be purchased using Clubcard vouchers. Can you get a better deal on your mobile due to how long you have been a customer? Taking a little time out here can save you a lot of money in the long run!
Be realistic –
If you have no chance of feeding yourself and your family for £200 a month, there is no point cutting the budget to that. Being realistic is key to your approach here, after all, you are only cheating yourself if you don’t stick to it.
Think about what really matters the most to you, before you start to trim back on your outgoings. You do need to be a bit ruthless but at the same time, you need to be realistic and focused on the end goal and the reason you are doing this.
I will be sharing soon our top tips on how to raise your income using things such as Quidco but in the meantime, why not check out this great post on how to save money on the shopping bill.
