How to Succeed on a Debt Management Program

So, you’ve finally taken the big step and enrolled in a debt relief program.

Now what?

If you’re going to succeed, you’ll have to alter the lifestyle that got you into a financial mess. That may include changing your eating habits, cutting utility bills, finding cheaper ways to get around, finding a mentor, getting a part-time job and even using apps to track your progress.


Look, nobody said getting out of debt was going to be easy. If some debt-relief company told you that, find yourself a new one immediately.

You may be down to one payment a month with your debt management plan, but you’re going to be making those payments for three years, maybe longer. To make the plan work will take work.

But as famed gonzo journalist Hunter S. Thompson said, “Anything worth doing is worth doing right.”

Of course, he also said, “I hate to advocate drugs, alcohol, violence, or insanity to anyone, but they’ve always worked for me.”

We do not advocate all that as part of a debt relief program, though a bottle of champagne is in order when you successfully finish and can enjoy a life of high credit scores, low interest rates, less anxiety and financial freedom.

Here are some steps that will help you break out the champagne one day:

Downsize Your Car and Your Car Payment

Cars cost an average of $8,469 a year, according to the American Automobile Association. A great way to save a bundle is to take public transportation or ride a bike or combine them both for a whole lot less than you spend on gas.

Unfortunately, that’s not a realistic option for many people. What is realistic is trading down to a more affordable fuel-efficient car. That should mean reduced monthly payments – hopefully, $100 or more – and could cut the yearly $1,500 average fuel bill in half. And every 5 mph you drive over 50 mph is like adding another 18 cents a gallon to the price of gas, according to the Environmental Protection Agency.

Eat at Home

According to various studies, the average cost of a meal at home is $4. The average cost of a restaurant meal is $13.

If you take your lunch to work, you’ll save $2,250 per year. If you cut out two restaurant meals a week, you’ll save $936 a year.

It’s hard (and boring) not to go out occasionally, of course. But skipping drinks and appetizers, ordering water instead of a $2.59 glass of tea and even sharing a meal will save you hundreds of dollars (probably thousands of dollars) over a year.

If you need a cup of coffee in the morning, make it at home instead of buying it on the way to work. Brewing a cup of coffee at home costs about 17 cents. You could have five home-brewed cups and still spend less than one trip to the local convenience store ($1 or more) and the arm and a leg you spend at Starbucks.

If you’re into high-end brews, you’re spending $25 a week. That’s $1,200 a year versus about $50 if you made it at home and poured it into a nice thermal mug for the road.

It can even be Starbucks mug.

Go Green: Monitor Your Electricity Usage

Don’t know how to save money on electricity? It’s not by turning off lights. The average household spends $112 a month on energy bills. Frankly, forgetting to turn off all the lights is not going to break the bank.

The average modern bulb eats about 20 watts an hour. If you forget to turn it off before a two-day trip, it’ll cost you about 78 cents.

Far bigger savings come from keeping ventilation filters clean, keeping your blinds shut in the summer and open in the winter and using a ceiling fan instead of an air conditioner.

Those three steps can save you between $62 and $118 a year. Computers, TVs and other electronic devices can cost an extra $100 a year.

Plug them into a power strip and turn it off when possible. Most electronics have memory chips that reset when the power comes back on, so you don’t have to worry about short-circuiting a system.

Cancel Cable

Cable is a $100 a month bill that can be a huge source of monthly savings. The average monthly cable bill in 2018 is $101 and going up. It is projected to be $200 by 2020, according to the research company NPD Group. Buying internet separately costs $50 or more a month, depending on how much speed you require.

A digital antenna is a one-time purchase of between $15 and $50. Sling TV will cost $20 a month, while Amazon Prime or Netflix will set you back about $10.

Whatever stand-alone services you choose, there are plenty of ways to save money on entertainment.

Better yet, unplug all your devices and read a good book.

Track Your Spending

It’s much easier these days with apps like Pennies, YNAB or Mint, which let you see what you’re spending in real time. They automatically update and categorize information from your bank, credit cards, IRAs and other accounts.

They create a budget you can take with you wherever you go, and alert you how today’s spending will affect tomorrow’s funding availability. It’s like having your credit counselor from the debt management company constantly there, reminding you to stay on track.

Best of all, the apps are free and relatively easy to use, even for the technologically challenged who use a smartphone just to make calls.

Have a Budget Buddy

Speaking of debt-management counselors, they can set up a budget but can’t force you to follow it. For that, you might want to find an accountability partner.

It could be your spouse or a family member or a friend. Ask them to help you monitor your spending and stick to your budget, and tell them to crack the whip if you stray from the plan.

It won’t cost a penny, though you might want to make them a nice home-cooked meal (splurge and go over the $4 average cost) for their services.

Clean up your Cleaning Expenses

The average U.S. household spends $42 a month on cleaning supplies, according to the website Statistic Brain. That can be drastically reduced using things you probably already have around the house.

Did you know you can get your toilet sparkling clean using a mix of baking soda and vinegar?

You can make your own furniture polish by taking a spray bottle and mixing in a ¼ cup of white vinegar with a few drops of olive oil.

Glass cleaner just requires a mix of cornstarch and rubbing alcohol.

You can find all sorts of homemade cleaning recipes on the internet. Using them could save hundreds of dollars a year, and keep your floors clean enough to eat your homemade meals off of.

Get a Part Time Job

Ugh again.

All the aforementioned ways of cutting expenses are great, but they’re often only half the battle. Increasing your cash flow is the other, and that’s real work.

What kind of job depends, frankly, on how badly you need to shore up the “revenue” portion of your budget. There is no shortage of part-time work available at grocery stores, fast food joints and retail outlets.

They’re not glamorous or fun or self-fulfilling, but you don’t need to get a second college degree to meet the hiring qualifications.

Besides, it’s a J-O-B. There is no Constitutional right that work must be glamorous or fun or self-fulfilling. The only right you can expect is that it will help you make ends meet, which is a reward in itself.

That said, there are plenty of jobs that aren’t sheer drudgery and pay more than $8 an hour. Ideally, you’d find something that involves something you enjoy doing, like working with children, selling a product you like or even working in the yard.

I know a guy who bought a lawn mower, an edger and started passing out flyers advertising his upstart lawn care service. In two weeks he had a half-dozen regular clients and was making an extra $400 a month.

Since he dealt in cash, it was also tax-free. Just don’t tell the Internal Revenue Service.

The growth of a sharing, electronic economy has made it much easier to start your own business, like selling products on eBay or turning your car into a taxi.

Drivers for companies like Uber or Lyft typically earn between $15 and $25 an hour in larger cities. Expect about half that if you live in a smaller city. That can be supplemented by delivering food or grocery orders for services like UberEATS, GrubHub or Instacart.

If you have a skill teaching, writing, typing, accounting, babysitting etc., the digital revolution has made it easier to market yourself. Websites like Upwork, Fiverr and TaskRabbit create profiles, post jobs and connect people looking for help with those who can offer it.

Tutoring is a growing business. The hitch, of course, is that you must be good at something like math or science. But if you are, there are plenty of opportunities to earn $15 to $50 an hour, sometimes more.

Again, there are apps and websites to help. Wyzant, University Tutor and Tutor Matching Service connect students and tutors.

If you’re not a math or science whiz, there is one industry that doesn’t care and keeps on growing – Food. The Bureau of Labor Statistics (BLS) estimates 182,500 new positions for waiters and waitresses will be added between 2016 and 2026.

The average waiter/waitress makes $5.09 an hour, according to, but tips range on average from $3 to $16 an hour. And if you’re really good at it, waiting positions in high-end restaurants can turn into six-figure jobs.

Bartending is another way to earn above-average pay and maybe have some fun on the side. The BLS reports the average bartender makes $10 an hour before tips. And there is no foreseeable shortage of customers on the horizon.

If the thought of working another 10 or 20 hours a week or giving up Starbucks depresses you, remember it’s for a good cause – You.

You enrolled in a debt relief program because you were tired of bill collectors, sleepless nights and feeling as though there was no way out. There is a way, however, and you’ve taken that big first step.

Congratulations, but that’s all it is. If you’re going to get anywhere, you’ll have to keep moving.


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