Debt can make it impossible to live a normal and happy life. When you’re constantly worried about making payments and stressing about how you’re going to get out of debt, it’s hard to stay positive. Sadly, we live in a culture of credit, and most people are way too willing to make purchases that they can’t afford to pay off quickly. This leads to ever-increasing amounts of debt that can quickly become a nightmare situation. So why not think of ways to save and get out of debt?!
5 Ways to Save and Get Out of Debt
By understanding how to start saving money and committing yourself to paying off your debt, you can achieve financially freedom and stability. While it won’t happen overnight, if you stick with the plan, you can see a drastic reduction in your debt.
Here are 5 great ways to save and get out of debt.
1. Create a Budget
It’s very easy to get into debt (and stay in it!) when you don’t have a budget to stick to. One of the first ways to save and get out of debt is to figure out:
- how much money you make each month, and
- where it all goes.
Take the time to calculate your monthly income while also writing down how much money you have to put towards bills each month.
The good news is that in today’s world, budgeting is easier than ever. There are all sorts of mobile apps available that are great for keeping track of your income and sticking to a budget including:
- You Need a Budget
By taking the time to create a budget, you can keep a close hold on your money and know exactly where it’s going. With a budget you’re able to figure out where you can cut costs and how you can save money now and long into the future.
2. Stop Taking on New Debt
The next thing you can do is to stop taking on new debt. Starting today, acknowledge that your debt is a problem and make a conscious effort to not open any new loans or to charge any of your credit cards. While it’s a hard pill to swallow, the debt you’re in is no one’s fault but your own. By realizing this, you can take charge of your finances and take the first steps to reducing your debt and minimizing the burden.
The second part of not taking on new debt is to control your spending. Avoid making large purchases as this will take away from the money that you have available to put towards your debt.
Related: 5 Ways to Get a Grip on Spending
Once you have a budget and are committed to not taking on new debt, it’s important to create a plan of attack.
An effective way to pay down debt is to try the snowballing method. This method involves paying off the loan or credit card that has the highest interest rate. Try to pay at least twice the minimum payment so that more of your payment can go towards the principal balance. This way less money goes towards interest and you’re able to pay off your debt quicker.
By using the snowball method, you can tackle the smallest debt first and pay it off sooner than any other debt that you have. After you pay off the smallest debt, you move onto the next largest debt. By paying off those little debts, you’ll have the motivation to keep the snowball going until (presto!), you pay off all your debts!
4. Cut Household Costs
While you may not have much say in your monthly mortgage payment, you do have control over other household costs like groceries, utility bills, and in-home entertainment. Find ways that you can reduce your household spending so that you have more money to save and put towards paying off your debt.
There are all sorts of ways you cut costs to include:
- Opening the windows to cool your home
- Using coupons when grocery shopping
- Bundling entertainment services
- Switching to streaming video
By saving money on household costs, you’ll have more money to put towards your debt. The less money you have to spend on household items, the better.
5. Make More Money
Saving is important for paying down debt, but another effective method to stabilize your financial grounding is to find ways to bring in more income.
Think about picking up a side gig such as:
- pet sitting,
- selling pictures, or
- selling items online using eBay or another marketplace.
The more income that you’re able to bring in, the easier it will be to pay off debt.
It’s Time! Save Money and Get Out of Debt!
Debt isn’t an easy problem to escape, but it’s not an impossible feat. With enough time, dedication, planning, and budgeting, you can pay down your debt and take charge of your finances. Using these 5 methods, you can save money and get out of debt.
Do you have any helpful ways to save money and get out of debt? Leave a comment with your best tips in the section below!
AUTHOR LaTia Longuemire
My name is LaTia Longuemire. I enjoy writing, singing, and cooking in my spare time. My passion is helping others. At this stage in my lifetime, I'm primarily focused on my children. They are everything that keeps my world spinning.