There is a strong need to realize that you should not spend extra money on extra expenditures. You can save yourself from many troubles. Try to save some money for your difficult time. Following are some points and by following these you can save a lot of money.

1. Plan for small goals

You should plan some simple goals to make your financial positions more strong. Do not waste your money on high goals planning.

2. Main concept of frugality

The main idea behind the frugality is that you can live better if you have fewer liabilities to pay. If you are in debt it is too hard for you to achieve your goals. So start spending your money to pay your debts and first finish them then plan your goals. It will also relax your mind.

3. Celebrate your success

Have some fun or celebrate when you achieve your target. According to Foreman you should maintain an accomplishment list as a reminder.

4. Motivational yourself

Some people want some encouragement to motivate them. They need some encouraging words from their seniors or from their family members or friends. Reward yourself with wherever motivates you. It helps in gaining your new goals.

5. Save money on monthly basis

You should try to save some money from your budget, rather than feeling deprived. For example you can save small amount of money regularly for six months and can buy what ever you want to buy.

6. Save for hard time

You can live a better and relax life if you change your spending habits. Try to safe more and do not spend your money on extra products. Manage to safe some of money in your account so that you can face the hardest trouble you will face.

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The recent economic crisis may be the worst time for many of us, but it may be an opportunity for us to look back at history and learn how the previous generations have dealt with such situations and apply the same rules.

The current downfall may be exactly like the Great Depression that occurred long time back and thus taking some tips from the grandparents or great grandparents that went through it, we can gain perspective on our own situations and make things better. Here are some of the steps to help us fight in this time of crisis.

The 7 Golden Tips of Survival

1. Quit going on credit.

One of the first lessons learned by people who survived the Great Depression was to never borrow money unless you have a clear plan for how you’re going to pay it back. And when layoffs are a reality, expecting to pay for it with your Christmas bonus or your next paycheck is not a sound plan.

If you don’t have the cash to make a purchase, then don’t buy it. If you have credit cards, make sure to pay the balance off every month. If you can’t pay off the balance, then cut up the credit card(s) and work on paying down what you owe.

2. Build good relationships with family and friends.

Be honest with your family and friends about your financial difficulties. They will see you through difficult times. Try to find out ways to help each other and discover new ways to barter. Families that stick together in difficult times develop stronger bonding by cherishing the simple pleasures of life.

Having fun doesn’t necessarily mean spending a lot. People still had fun during the Great Depression. Teenagers had dance competitions; people played monopoly, did puzzles, read books and listened to the radio. It did take some effort but they had fun without hanging out at the mall and so can you. Talk to you children about the financial crisis and get the adult kids to put in their share. This way the whole family will feel connected and the hard times won’t be so difficult to pass.

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You need to cut down your monthly expenses and live frugally if you ever want to get out of debt. Let’s assume you have a $20,000 in credit card debt and you current minimum payment is around $500 per month. Unless you really don’t want to pay your credit card bills at all. You have to pay it in full before you can cancel your credit card.

Let’s say you have $14,000 in credit card debt and your current minimum payment is $350. At 21% with a minimum payment of 2.5% it will take you 542 months to get rid of your debt. In that time, you will pay more than $32,000 in interest. this is not at all funny. but this is how this works.

If you keep paying a fixed amount of $350 dollars (which is your current minimum payment),It will take you 70 months to be rid of your debt. In that time, you will pay $10,290.27 in interest. Still Its unacceptable.

However, If you manage to reduce expenses by $200 each month and apply that amount to your credit card’s minimum payment, then each month you can payback $550. this way, It will only take you 34 months (3 years) to get rid of all your debt. during this time, you will pay only $4,692.23 in interest. this is also crappy but better than 542(45 years) ye and 70 months(6 years) and you will save some where between $6,000 to $28,000 in your interest payments.

Best course of action in this situation is to transfer your debt to a low interest credit card or apply for a debt consolidation loan

If you still doubt in what I say, You can use this Minimum payment calculator to find out how much money you will be wasting by not paying off your credit card balance as quickly as possible.

Indeed, there is no feeling like getting out of debt. Its always better than watching cable tv or dining out with friend. You will get more joy out of these activities when you are debt free.

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