Start paying in cash. Most people spend about thirty to forty percent more when they pay with a credit card. By hitting the ATM once a week and separating cash into envelopes, you’ll feel the pinch harder at the checkout counter. Forcing yourself to spend only what’s in the envelope keeps you from making dangerous impulse purchases.
Use the freezer trick. Find your credit card with the best interest rate and hide it in your freezer. Cut up your other cards and pay down as much as you can. If you really need to make an emergency purchase, your best card’s in a safe place. But you won’t want to take it to the mall – it’s too cold for your pocket!
Follow the thirty-day rule. When you find something that you think you really love, force yourself to put it down. Instead, mark that item on a calendar. In thirty days, if you still love it and it doesn’t break your budget, go ahead and buy it. Usually, you’ll realize you didn’t really need it.
Bounce that balance. Call your credit card companies to negotiate competitive interest rates. If they won’t budge, bounce your balance to a card with a strong promotional offer, and pay it off as quickly as you can. Avoid making too many balance transfers, since they’ll erode your credit score over time.
Leverage your interest rates. Use any liquid savings to pay off higher interest debt. What good is $10,000 in a 2% savings account when you’re paying 18% on $5,000 in bills? Avoid debt consolidation loans, especially those that require you to open a second mortgage or a home equity line of credit. If you hit hard times, a credit card company can’t take your house, but a mortgage lender can.