When was the last time prices at the pump or the supermarket didn’t make you look twice? If you’ve felt the burden of increased expenses over the past few years, you’re not alone. Since 2021, essentials like groceries, utilities, and gas have increased by 20% or more (CNBC).
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But don’t worry! With the right mindset and spending changes, most people can navigate financial uncertainty and even improve their financial situation. Here are some top tips from the Budge coaching team on how to crush your debt during a cost of living crisis.

Shift your perspective: from overwhelmed to empowered. 

Viewing debt not as a permanent stain, but as a temporary obstacle can transform despair into motivation. Believing in your ability to conquer financial hurdles is foundational to achieving your goals. Consider this: 

• Costs of living fluctuate, the fact that you control your money decisions doesn’t change. You always have the final say. 
• With consumer credit card debt reaching $1 trillion for the first time in 2023, know that you are not alone. 
• Acknowledge your situation, but recognize you want to change. Then put together a plan. 
• Celebrate the wins, however small.
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Build a simple plan for your debt paydown.

Many looking to overcome their debt often fall victim to “paralysis by analysis”, so it is crucial to understand your debt and make a plan to eliminate it. The snowball method recommends that you pay small debts first, while the avalanche method recommends paying the debts with the highest interest rates. While everybody’s debt situation is different, both the snowball and avalanche methods are great choices for most people. What matters most is that you choose a method and stick to it.
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Budgeting: your roadmap to financial freedom. 

Budgeting isn’t about restriction; it’s about empowerment. Creating a budget that accounts for all your expenses, prioritizes your debt repayments, and still allows for essential living costs is critical. 

• Cutting costs doesn’t mean cutting joy: your budget should function around your needs and leave space for voluntary spending.
• Find cost-effective alternatives for daily expenses. Even small savings can add up significantly over time.
  
  

If you don’t have time to budget, think about your expenses and identify if there are any areas you can cut. You don’t need a spreadsheet to tell you that you are spending too much money eating out…
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Find areas to cut your bills down.

You don’t have to look far to find companies that are taking advantage of the cost of living crisis to raise their prices. Many people can save over $100/month just by taking a quick look at these areas of their monthly bills:

1. Cable/high-speed internet companies are notorious for raising their prices without justification. Look at rates in your area and call your cable company to cancel due to a competitor. Many people can save between $30-$50 a month with one phone call. That’s $600/year.
   
   
2. Wireless phone companies are finding themselves in a race to the lowest price possible. Consider switching to T-Mobile or a discount phone service run by a major carrier like MetroPCS or Mint Mobile. They operate on the same networks and often for half the price.
   
   
3. Check your power company for special rate programs based on usage. Oftentimes there are different options based on how and when you use your power the most. 
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Conclusion: you’ve got this! 

While costs are increasing and it is painful for our wallets, you can beat inflation. It starts with shifting your mindset and building a plan. Although you might have to live your life a little differently in some areas, you can beat your debt in this environment. 

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