California has a whole lot going for it, but it comes at a price: it’s expensive to live in the Golden State, particularly if you’ve had a financial setback. Add inflation to the mix, and Californians are increasingly whipping out the plastic to make ends meet.
In fact, residents there have an average of $3,300 in credit card debt – above the national average. Further, the average credit card utilization rate among Californians seeking debt relief is 73 percent. That’s compared to an average national rate last year of 25 percent. High utilization use typically portends acute financial trouble.
However, hope abounds. Here’s how to get control of spending habits in California.
Change Your Way of Thinking
The first thing you must do is decide to get out of debt. Once you do that – and mean it – you’ll stop spending so much because you know that overspending is what got you in your condition. Just understand that you must make life changes.
Know How Much You Owe
You need a specific goal, which means you must have a clear picture of your debt load. Take the time to list all your debts, your current balances, and your interest rate on each debt. Nothing like looking right at what your spending has wrought.
Track Your Monthly Spending
You may not want to do so, but it’s imperative that you not only know what you’re spending but what you’re spending on. That $4 daily froufrou coffee? Yes, those add up, as do all those other “little” purchases. The fact is that most people don’t know where their cash is going each month. You may want to employ a program or app to help you track, and improve, your spending habits.
Lose Those Unused Subscriptions
They’re only a couple of bucks monthly, so even if they’re subscriptions you don’t really use, you just keep paying for them. Why? Doing so is part of your spending habits. But like those daily lattes, these subscriptions do add up. So, check your credit or debit card statements to see the automatic payments you make for subscriptions you rarely, if ever, use or that you can live without. We’re talking subscriptions such as Apple Music, Spotify, and Planet Fitness. If you’re not using it, cut it off.
Dine Out Less
Those frequent $20-$40 meals can get you in trouble – fast. Why not make the decision to, at least, confine your dining out to the weekends, if that? Oh, and pack your lunch during the week. Use the savings to pay down your debt.
Lower Your Cable/Phone Bill
Politely tell your cable company that unless you’re allowed to renegotiate your payment plan, you’re likely going to have to drop their service. Use the same approach with your phone company. These companies don’t want to lose your patronage, especially if you’re a long-time customer, so chances are they’ll work with you. After all, do you really watch 500 channels? Not even close, we know.
Stop Using Your Plastic
If you’re going to get control of your spending habits, you must stop using your credit cards, or at least only use them for necessities. That’s why it’s important to have an emergency fund of at least $1,000 so that you’re not pulling out a card for unexpected expenses such as a car repair or veterinary bill. If you’re in serious trouble already, debt settlement may be your way out. Learn more from Freedom Debt Relief.
Establish a Budget
Now that you have a good picture of what you’re spending and have taken actions to lower this amount, you can see what you have remaining every month to put toward your obligations. Be sure to add a room to your budget for fun and “wants” so that you’ll stick to it.
Ultimately, the spending habits of Californians can be controlled sufficiently to improve their financial future. Residents simply must incorporate as many of the above recommendations as possible. If you’re one of those residents and are already in over your head in unsecured debt, you may want to seek debt settlement through Freedom Debt Relief.
