Are you struggling to pay off your debt and looking for ways to save money and get your finances in order? If so, you’re not alone. Millions of people are in the same situation.
In this blog post, we will discuss 9 proven tips that will help you save money and pay off your debt. Follow these tips and you will be on your way to financial success!
1. Start With A Budget And Track Your Expenses
The first step to saving money and paying off debt is to create a budget. This will help you track your expenses and see where your money is going each month. To get started, look at your income and debts, and then make a plan to spend less than you earn each month. This will help you free up extra money to put towards your debt.
Don’t forget to include:
- Side hustle income
- Credit Card Debt
- Student loans
- Personal loans
- And any other type of debt or income
After you’ve recorded all your income, debt payments and bills, it’s time to start focusing on tracking your spending.
Tracking your expenses is a key part of getting your finances in order and will help you find areas where you can cut back on spending. There are many ways to track your expenses, including using a budgeting app or creating a spreadsheet.
Once you have a good handle on your monthly expenses, you can start looking for ways to save money. There are many simple ways to save money each month, such as cooking at home instead of eating out, carpooling or taking public transportation, and buying generic brands instead of name brands.
If you are serious about getting your debt under control, you may also want to consider making some bigger changes, such as downsizing your home or getting rid of your car. These changes can be difficult, but they can also save you a lot of money each month.
2. Make A Plan To Pay Off Your Debt
Once you have a handle on your budget and expenses, it’s time to start working on a plan to pay off your debt. The first step is to list out all of your debts, including the balance, interest rate, and minimum payment for each one.
Then decide in what order you want to pay off your debts. Some people choose to pay off their debts with the highest interest rate first, known as the debt avalanche method, while others prefer to pay off their smallest debt first, known as the debt snowball method. Personally, I like what I call the Nor’Easter Method. There is no right or wrong answer here, so choose the method that makes the most sense for you.
Once you have a plan in place, start making extra payments on your debts each month. Even if you can only afford to make a small extra payment, it will help you pay off your debt faster.
3. Automate Your Savings
One of the best ways to save money whether it’s for an emergency fund, or some other financial goal is to automate your savings.
This could mean setting up a direct deposit from your paycheck into your savings account or just setting up a savings automation with your bank. For example, you could have a $20 transfer from your bank account to the savings account you’ve set up for Christmas.
The best part about automating your savings is that you don’t have to think about it. The money will be transferred into your savings account each month without you having to do anything.
If you are looking for ways to save money, automating your savings is a great place to start.
Related: Should You Automate Your Finances
4. Negotiate Lower Interest Rates On Your Debts
If you have high-interest debt, one of the best things you can do is negotiate with your creditors to get a lower interest rate.
This may seem like a daunting task, but it’s actually pretty easy to do.
All you need to do is call up your credit card company and ask them if they can lower your interest rate. If they say no, you can always ask to speak to a supervisor.
It’s also a good idea to have a plan in place before you call. For example, you could say that you’re considering transferring your balance to another credit card with a lower interest rate. This usually works because the credit card company doesn’t want to lose your business.
If you are successful in getting a lower interest rate, you’ll save money on your monthly payments and pay off your debt faster.
There is no harm in trying to negotiate a lower interest rate, so it’s definitely worth a shot.
5. Pay More Than The Minimum Payment Each Month
Another great way to pay off your debt faster, especially high-interest debt, is to make more than the minimum payment each month.
If you make only the minimum payment, you’ll end up paying a lot in interest and it will take much longer to pay off your debt.
However, if you make even a small extra payment each month, you can save a lot of money in interest and pay off your debt much faster.
For example, let’s say you have a credit card with a balance of $1000 and an interest rate of 18%. If you only make the minimum payment of $25 each month, it will take you 5 years to pay off the debt and you’ll end up paying over $500 in interest.
However, if you make an extra $9 payment each month (for a total payment of $34), you can pay off the debt in just three years and you’ll only pay about $328 in interest.
As you can see, making even a small extra payment each month can save you a lot of money and seriously speed up your debt repayment.
6. Create Separate Accounts For Savings And Spending
One of the best ways to save money is to create separate accounts for your savings and spending.
This way, you’ll be less tempted to spend your savings because they will be in a different account. If you want to take it a step further, consider having the accounts at separate banks and having multiple savings accounts, so you have an account for each savings goal.
If you have a hard time-saving money, this is a great way to make it easier.
Creating separate accounts for your savings and spending is a great way to save money and make sure you aren’t tempted to spend your savings on frivolous things.
7. Sell Unused Belongings For Extra Cash
If you’re looking for ways to make extra money, selling your unused belongings is a great option.
You can sell items that you no longer use on websites like eBay, Facebook Marketplace, or Craigslist.
Or, if you have a lot of items to sell, you could even have a garage sale.
Not only will you make some extra money, but you’ll also declutter your home.
Related: How to Get the Most for Selling & Donating Your Stuff
8. Earn More to Pay Off Debt Faster
If you want to get out of debt as quickly as possible, you need to start by earning more money.
There are a few ways you can do this, such as asking for a raise, getting a better-paying job, or starting a side hustle.
A good way to ask for a raise is to do research ahead of time so that you can show your boss how much you’re worth.
You could also look for a new job that pays more than your current job.
Or, if you want to make some extra money on the side, there are plenty of ways to do that as well. You could start a blog, become a freelance writer, or start a side hustle.
There are endless possibilities when it comes to earning more money.
You just need to get creative and think outside the box.
Related: 9 Best Weekend Side Hustles
9. Stop Accumulating Debt
If you want to get out of debt, you need to stop accumulating debt, it’s really hard to pay down your debt balance when you keep adding to it.
This might seem obvious, but a lot of people continue to accumulate debt even after they’ve made the decision to get out of debt.
One way to stop accumulating debt is to cut up your credit cards or leave them at home. Alternatively, consider using only cash or debit cards for any purchases.
The best way to stop accumulating debt is to make a budget and stick to it.
If you know how much monthly income you have and how much your monthly living expenses are, you can make sure that you don’t overspend.
It’s also helpful to set up emergency savings for unexpected expenses so that you don’t have to put them on a credit card.
If you’re looking for ways to save money and pay off debt, there are several things you can do.
- make extra payments each month,
- create separate accounts for your savings and spending,
- sell unused belongings,
- earn more money,
- start budgeting, and
- most importantly stop accumulating debt.
Try out a few of these tips and see which ones work best for you. Just remember, it’s important to be patient and consistent when you’re trying to save money and pay off debt. It won’t happen overnight, but if you stick with it, you can reach your goals.