5. Study Your Money
Among the many lessons the corona- virus pandemic has taught us is that you never know when uncertainty will hit, turning lives upside down and creating a financial crisis that could cripple pocketbooks for the long haul. When times get tough, educators certainly feel the pinch. Now is a good time to study your money. Here are some areas to explore:
Stick to a budget
The key to managing debt and using your purchasing power to your advantage is to create a household budget and stick to it. A budget will show your spending patterns and alert you if you’re spending more than you’re earning. If you find your budget is full of red flags, there are several ways to get it under control.
First, prioritize your bills from big to small. List your debts, and pay off the debt with the highest interest rate first. When that one is zeroed out, take the same dollars and pay the next debt on the list, until you’ve cleared the debt decks.
Or, do the opposite. Financial guru Dave Ramsey suggests the snowball method: Pay off the smallest debt first for some positive reinforce- ment, then apply those payments plus any extra cash to the next biggest debt. Repeat this process with the next biggest debt on the list. This allows you to snowball available cash for payments as you work your way up to your largest debt.
You can also negotiate with creditors. Call creditors and ask for lower interest rates or see if they will take less than the full balance in exchange for a quicker cash payment.
Reduce monthly bills
While your bills may seem fixed and inflexible, cutting them down to size is possible. A good place to start is by reexamining expenses such as your home phone, cell phone, cable TV, and internet.
“For example, if you are paying for a cellphone, do you really need a landline as well?” says Leslie H. Tayne, attorney and founder of Tayne Law Group, P.C., in New York, and a debt management, debt resolution, and bankruptcy expert. “If you have a Netflix and Hulu account, … can you make do without cable?” she asks.
Cellular service alone can add a whopping $110 to your monthly bills.
Pay attention to overage alerts from your cellphone carrier, and take a close look at how the phone is being used. All those Facebook notifications could be costing you a lot of money in data. Find out if a no-contract phone could save you money.
Another place to look is your cable bill. Are competing cable companies offering better rates? If so, use that info to negotiate a better deal with your company, or switch to a new one. Also ask if they offer any discounts for veterans, seniors, or educators.
The bottom line
You have to invest the time and effort to make any saving strategy work. It takes home- work, investigation, and com- parison shopping. Little cuts here and there will add up, and every little bit you can save now will help ease your monthly financial obligations.
—BRENDA ALVAREZ
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