Bill Consolidation Guide - Financial Disipline

Bill Consolidation Step #1: Financial Discipline The first step on bill consolidation, surprisingly, has nothing to do with payments. Instead, the payer has to get a handle on his living costs and expenses. When under the gun to pay bills that add up to more than cash flow coming in, everyone will immediately say they have already tried all their options. The reality is, this is not true for most people. The American way of life has made us believe we need a lot more than we really do to live and function. We have to have cable TV to be entertained. We need to drive bigger and bigger cars to move everything we have or go where we want to go. We need to buy all our food in bulk from warehouse stores because our pantries need to always be full. The list goes on. Much of what we consider necessary as consumers has to do with comfort rather than necessity. Think about it: the average person working spends $5-10 for breakfast and a coffee, then another $10 for lunch, and probably $5 on a soft drink or coffee on the way home. That totals up to $20-25 a day on food or $600-750 a month (every 30 days). The same consumption can be had for $10 a day if the same person packed his food and brought it with him during the day. The difference adds up to $15 saved, or $450 a month. How many bills can you pay with an extra $450 a month? Probably four or five at least. Discipline for bill consolidation is not fun. No one likes to be deprived, and you truly understand what it means to be well-off when you can spend without having to worry about having money left over for a bill deadline or gas in the car. However, when you're in a financial hole, the only way to get out of it is when your income once again becomes more than your spending. And if you're not going to go and get a second or third job, then you have to reduce spending to make the numbers work in your favor again. Working through your expenses is not hard; you've already done half the work when you made the spreadsheet of your regular expenses for the month. Go through each item and ask yourself 1) is it really necessary to have, 2) can it be reduced at all, or 3) can it be eliminated altogether? For example, if you have a house phone and a cell phone, do you really need to be paying both bills? Maybe you don't want to get rid the landline phone altogether for safety (i.e. 911 access). Guess what - phone companies offer a stripped down version of access for about $20 a month, far less than a regular phone bill of $65. That saves $45 a month, and you still have phone access on your cell phone. As a result, bill consolidation's start involves taking a real hard look at all your regular expenses and stripping down all the conveniences to just what is necessary.

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