If you’re like any one of us out there, you’re probably growing more and more reliant on credit cards, loans and other sorts of debt to make ends meet.

As the bills keep coming in and companies start to call your home, you start to wish you could do anything just to make this debt go away so that you can improve your financial situation and become entirely self–sufficient.

Thankfully, even in these dire financial circumstances, the most debt–plagued of us can still make it out from this unfortunate situation and gain the financial independence we need to give ourselves peace of mind.

Is it Easy to Improve Your Financial Situation?

In today’s post we’ll be going over several things that you can do so that you are less reliant on borrowed money. You’ll be able to size up exactly how much you owe, pay it off, and find ways to live without needing to accrue more debt. Wouldn’t that be a huge weight lifted off of your shoulders?

Organizing Your Finances

First on the list should be finding out what you’re up against. This may be scary, but you need to do it.

Sit down and start writing down every financial fact about yourself, including annual income, tax deductions, any credit card and loan payments, insurance premiums, food, gas and grocery bills, even entertainment spending – anything that either makes you money or costs you money.

Be completely honest – every single penny that you spend should be factored into this list, so you can make an accurate appraisal of your spending habits and what your money goes to.

Once you have this list, add up the amount of money you make in a year, and also figure out the total expenses that you have on an annual basis.

How much of a disparity is there? Are your expenses higher than you income? By how much?

Are you using credit cards to pay your monthly bills?

How much of your money goes to things that you don’t actually need?

If you’re spending a lot more money than you’re making, it’s no wonder you’re in debt.

Making More Money

Are you looking at your list that you’ve just created and wondering how you are going to pay for all this stuff when you don’t have enough money?

You may even find that, no matter how much you cut down on your expenses, your current income isn’t cutting it.

The only solution, therefore, is to make more money.

Obviously, the first step in this process is to either advance in the job you have now, get a pay raise, or look for another job that will pay you more money.

Try asking for a raise at your job, or look at positions within the company that are higher earning.

Update your resume and contact information, and secure references if you want to apply for another job.

In addition to that, you can do odd jobs for your neighbours or sell some of your belongings that you don’t need to thrift shops or on eBay.

You could even hold your own garage sale if you want.

Do whatever you can to generate more income on a monthly basis so that you can pay for these expenses that you incur.

Skip that Daily Latte!

As you look over the list of your expenses, be sure to look at the things that qualify as necessities – rent, taxes, utilities, insurance, and the like.

Once you do that, look at how much more money you spend on stuff you don’t need.

Of course, you need food and gas, but do you have to spend as much to get them?

Many people say that no one got rich by skipping their daily latte.

But when people are in a situation where every penny counts, the latte factor becomes very important.

Remember that the latte factor refers to so much more than just a fancy coffee.

It refers to any small expenditures that you make on a daily basis. It could be bottled water, candy, chewing gum, a bag of chips, magazines, pop, and so on. By the end of the month it all adds up. If you can find alternatives or quit buying those things all together, the money you were spending on those items could go towards paying off your debt or increasing your savings.

And what about those entertainment costs?

Try to cut down on entertainment first and foremost – if you’re slowly sinking into credit card debt, you don’t need to take a trip to the movies every week, or continually buy lunch at the local cafe, or head to the Pub for drinks and Nachos every night after work.

After that, look at how much gas you use. Is there any way that you can plan carpools or lessen the number of trips you make? Perhaps there’s another gas station close to your area that typically provides a better price on fuel.

Also, if you can start planning your meals and rely more on leftovers, you can start cutting down the number of times you go out to restaurants, as well as minimizing the number of groceries that you buy that just end up getting thrown away.

Related: 30 Simple Ways to Save Money

And, most importantly, just get your coffee at home, instead of wasting your money on the overpriced, overly processed stuff you get at coffee shops – it’s not helping your finances at all.

Each of these things might not add up to much on their own, but if you can successfully manage to cut down costs to what you absolutely need, you might find you have a lot more room to manoeuvre when dealing with your finances.

What’s more, you could even locate room in your budget to squeeze in that latte every once in awhile as a treat – just try not to make it every day.

Financial Goals

One of the best things that you can do for yourself is to set financial goals. After all, it’s all well and good to cut down on your expenses, but if you don’t have a goal in mind, you won’t be as inclined or motivated to follow through with your plans.

Start small when contemplating these goals – it can be something as simple as cutting your debt down to a certain percentage in a set period of time.

Once you find that you can accomplish that, you’ll start to feel a lot better about your financial situation, and you can start to set your goals higher.

Soon, you can eliminate your debt entirely, and once you’ve finished with that, try to work on realistic financial goals to attain, such as beginning to invest in the stock market or buying a new house or a new car, or taking a vacation.

Try to set time limits and deadlines for these goals, so that you’re more motivated to finish them quickly.

However, try not to do too much at once, because then you’re just setting yourself up for failure, and you won’t get anywhere fast.

Just take it one step at a time, and plan your larger goals in phases that you can easily meet, so you can feel the progress taking shape while allowing you to keep your momentum going.

Financial Freedom

By working on all of the above suggestions on a consistent basis you should be able to get the financial freedom that you deserve.

Initially you may feel like it isn’t easy to improve your financial situation. Please don’t be hard on yourself if you do not see instant results. Some people will be able to turn their financial situation around within 6 months or so, others may take 1 to 5 years.

find your financial freedom

Keep focusing on your goals and always maintain a positive attitude. It is so much easier to work on the things that challenge us when we look at things in a positive light and remember to smile.

Look at your complete financial situation; what you spend and what you make, and try to get it so you actually have money left over at the end of the year.

Once you do that, you can start to gradually work off your debt, and, before you know it, you won’t owe anyone anything.

Just imagine it; no more paying interest, no more juggling of payments, no more frantically avoiding calls from collectors or your credit card companies – just simple, honest financial freedom that gives you the ability to live without any financial worries. It can be quite a satisfying feeling, and it’s something that you can definitely experience given the right motivation and proper restraint.