Image of man with empty pockets - cannot afford DMP payment

If you don't qualify for a Debt Management Plan (DMP), chances are that the proposed payment is just beyond your current budget. However, simple changes to your lifestyle and how you schedule your monthly payment obligations can make all the difference in the world.

Minor Changes to Your Budget Can Make a Major Difference

In most cases, if the DMP payment is just out of reach, it means you probably have enough money to meet most of your obligations, but not all. Although this is a stressful and frustrating situation, you probably already have what you need to make the full payment.

Most people experience financial problems simply because they're not handling their money as well as they could. Ask yourself a few questions to start:

  • Do you have a steady income but can't figure out where all the money goes?
  • Do you pay for recreation such as movies, baseball games, and restaurants?
  • Do you purchase soda, coffee, or cigarettes on a regular basis?
  • Do you look for sales or just pay full retail prices?

If you're like most people, you answered yes to at least two of these questions. At this point, you'll want to download our monthly budgeting worksheet and complete it. Fill it out the best you can and come back to this article.

Okay, if you filled out the Budget Worksheet then you've taken a huge step in the right direction. Now you can see on paper where your money is going! Take some time to really look at what's on the paper in front of you. You may be surprised at what you see.

The next step is to keep a journal of all of your spending for at least the next month. Keep track of every penny you spend. At the end of the month, add everything up and redo your budget worksheet. At this point, you're ready to start cutting out expenses.

Here are some money saving ideas that will help you spend less and eliminate unnecessary expenses:

Grocery Shopping

Groceries are one of the biggest expenses for most families. Fortunately, there are quite a few ways to save money at the grocery store.

  • Don't go shopping when you're hungry
  • Clip coupons
  • Get the grocery store's savings card, if available
  • Make a shopping list - and stick to it
  • Compare prices - there are many different brands of just about any item you need
  • Buy bulk items when possible - paper towels and toilet paper are good examples of items that can be purchased this way at significant savings
  • New products often have mail in rebates. Mail them in

Utility Budget Plans

Do your utility bills fluctuate wildly? Do you spend more on utility expenses seasonally? Most utility companies can help you avoid these price spikes with what is called a Budget Plan. These are designed to give you a consistent monthly payment. This figure is usually calculated by taking the average rate of usage over a year and dividing it equally into 12 months. For example, if you used $1200 worth of electricity last year, your budget payment would be around $100 each month.

These plans are available from your gas and electricity providers. Call them and ask about their budget plan, and you won't have to worry about large utility bills anymore.

Cell Phone Deals

Calling Plans

If you're in the market for a cell phone, there are a lot of options out there. Most cell phone service providers offer a range of plans that vary from about $30 per month all the way up to several hundred dollars per month. The cost varies with the number of minutes available for your use each month, and the different fees each company charges. The key is to shop around. See what's available and decide which type of plan best suits your calling needs. The Internet is a good way to compare rates and features.

Keep in mind that once your available minutes are used up, the rates can go up as high as 50 cents a minute for every call over your limit. To avoid a large cell phone bill, it's important that you choose a plan that will give you the calling time you'll need. You will pay a higher monthly fee for the increased minutes, but as long as you don't exceed your limit, that fee will remain the same every month. This will help you budget yourself. If you don't plan on using your cell phone to replace your home phone, most of the less expensive plans will probably work for you.

Prepaid Cell Phones and Calling Cards

There are plenty of good options for people who have had difficulties with large cell phone bills. A prepaid cell phone is exactly that. You can buy a cell phone that comes with a certain amount of minutes, and actually pay to add more minutes as you need them. Most major cell phone providers offer some form of prepaid cellular phone plans. Some attractive features of this type of plan include no long-term contract, no credit checks, and full control over how much you spend for cellular service. Unfortunately the rates are higher, usually 30-40 cents a minute compared to 5-10 cents a minute for a traditional cellular service contract.

A prepaid calling card works about the same, except you don't get a cell phone with the card. You can purchase a calling card in increments of 100, 300, 600, and even 1000 minutes. The prices can range from $5 to $300 per calling card, depending on how many minutes you purchase.

The biggest advantage to these prepaid options is that you will never spend more than you want to by accident. When the minutes run out, you can buy more, or not. And the best part is that you can say goodbye to large cell phone bills.

Everyday Savings Tips

  • Turn off any electrical appliances, including lights, when you're not using them
  • Use the Self-Serve gas pumps
  • Buy sodas and juice from the supermarket, not from vending machines
  • Avoid ATM fees by using ATMs only in your bank's network
  • Go to a matinee instead of an evening movie, or better yet, rent movies
  • Ask for higher deductibles on your auto and health insurance policies - the monthly premiums will be cheaper
  • Empty your pockets each night and put your coins in a jar
  • Look for sales
  • Cancel pay channels that you don't watch
  • Follow your car manufacturer's maintenance program. Maintenance is cheaper than repairs
  • Pay off credit cards and high interest debt as quickly as possible
  • Vacation in the off season

If you find that there is little or no money available to apply to your debts, you still have some options:

Part-Time Job

To create additional cash flow, you can take on a part-time job. Make sure you come out ahead without spending the extra money on additional travel, clothing, childcare, and food expenses. The key is to make more money so you can pay off your bills.

Friends or Family

If you feel comfortable doing so, you may wish to consider obtaining a loan from your friends or family members.

Use Your Hobby to Make Extran Money

You may be good in mechanical areas, crafts, electronics, photography, carpentry, cooking, etc. Analyze whatever special talents you may possess. See if you can advertise your second calling and make a profit from doing the things you enjoy.

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