If you’ve mismanaged finances early on, odds are you’re probably at your breaking point with a monthly budget that can’t cover all your bills. Filing personal bankruptcy doesn’t have to be the answer to eliminating debts. In fact, Dutchess Partners have found five ways you can reduce your monthly bills without resorting to bankruptcy. 

1. Look at Your Current Monthly Bills

You may want to scream at your monitor after checking your monthly interest payments. However, this step is vitally important because you must see where your money is going. It’s the only way to determine how to reduce your monthly bills. Be tough. Include all monthly bills. In fact, print off bank statements, credit card bills and other statements to look at them. Write down all the debts and determine exactly where your hard-earned money is being spent.

2. Negotiate with Creditors

Another way to lower your monthly bills is to contact your creditors to work out a lower monthly payment. Let your creditors know that you are willing to pay what you owe. However, you only have so much money available to work with. Some credit card issuers may provide a hardship plan, which allows you to pay either a lower interest rate or a lower plan for a specific amount of time. Make sure to obtain an agreement in writing and have them mail or email it to you. 

3. Cut All Unneeded, Obvious Bills

After you know all your monthly bills, start cutting. Everyone has expenses that aren’t used to fill a need, such as entertainment, dining out, subscriptions and memberships. Cutting expenses doesn’t mean that you are required to live an unhappy, boring life. It just means that you are cutting things you really don’t need. For example, you may spend $40 for a gym membership each month but only go to the gym one or two times a month. Ditch the membership and save the money. The goal of cutting unnecessary expenses is to give yourself some breathing room in your budget and some extra cash. 

4. Cut Even More Expenses from Your Monthly Bills

This is probably the hardest step to reducing your monthly bills. You’ve cut all your obvious bills. The next step is to cut the expenses you feel it is difficult, but not impossible, to live without. This includes the extra cable channels or streaming services, ordering pizza during football games, or going out with your significant other every weekend. This may cut a big chunk out of your monthly bills. It also gives you additional money in your monthly budget. 

5. Try the Snowball Method of Lowering Monthly Bills

It’s often a dilemma. Do you pay more on all your monthly debts to get a handle on them, or a prioritize a specific debt? The snowball method focuses on building momentum. Make a list of debts that don’t include rent or mortgages. The list should be organized from smallest to largest balances. Make the minimum payments on all the debts, except the smallest one. Make an additional payment towards that monthly. 

Once that debt is eliminated, move on to the next smallest debt until your debts are gone completely. This may sound like a tough thing to do, but you are achieving two goals. The first goal is reducing your monthly bills. You make the minimum payment monthly but pay a little extra on one until it’s paid, then move on to the next bill. By the time you reach the top of the list, you don’t have any nagging bills and can focus entirely on what once seemed overwhelming.

You Can Reduce Your Monthly Debts

The power to lower your monthly bills rests in your hands. You can consolidate a loan via Dutchess Partners. It’s one way to avoid the high interest rate credit cards and regain control of your monthly payments.