How To Save Money To Pay Off You Debt
Shopping non-stop, booking plane tickets, purchasing luxury items and other pleasurable expenditures can make you feel alive. When bills arrive, reality bites and if you’re not careful you may find yourself neck-deep in debts to be paid.
Financially burdened with mountain-high debts? This post will teach you a few nifty tricks on how to pay off your debt in a year – or less.
Establish a budget for needs and remove inessentials. Sort out the needs from the splurges first. This will help you determine the non-essentials you need to cut back on. Use financial mobile apps like Mint or create your own spreadsheet to help you track your expenses and wisely allocate your funds.
Don’t incur new debts. Being in debt is a wakeup call to fix your financial habits. Do not be swayed by enticing advertisements and sweet talks of telemarketers offering loans.
Tackle the top. List down of all your debts and arrange them from the highest to lowest rates. Start allocating the biggest portion of your income to the item with highest interest rate first. Don’t neglect the smaller debts though, pay the minimum balance at least.
Pay more than the minimum balance. If your budget allows you to pay more than the minimum payment required, then do so! This will save you from a prolonged period of debt and ballooning interest rates.
Sacrifice your work bonuses for the time being. Dedication to attain financial freedom also demands bonuses to be dedicated to debt payment. Fixing your financial situation is a must. The vacation and simple luxuries can wait until you are financially ready.
Delete your card information online. If your debit and credit card information is saved on shopping websites and apps, make sure you delete the digits. The purchasing inconvenience will make you re-think if you really need to buy an item or not.
Sell unwanted gifts and unnecessary items. Be resourceful and look at your surroundings for means to earn extra cash. Declutter your home and look for quality items you do not need that you can sell. Do some research to come up with reasonable prices. Hold a garage sale or post photos of the items online.
Do not neglect your emergency fund. No one expects emergency situations, but you must always be ready for unwanted storms that can break your bank further. While paying your debts, continue to stash a small portion of your money to an emergency savings fund. This will serve as your savior from unexpected expenses and from incurring another episode of debt.
Increase your income. This is the best way how to pay off debt fast with low income. For circumstances when saving and cutting on expenditures are not sufficient, the only way out is to increase your sources income. Try looking for a higher paying job. If you are under a contract or you’ve maxed out your earning capacity as a professional, get another job on the side. Do this for the meantime until all your debts are paid fully.
Written by Josh Cornehell, Analyst at eCompareMo.com. eCompareMo.com is the country’s leading and complete comparison portal intended for Filipinos, specializing in banking and insurance information.
Resources: Lifehack, clark, Money | US News, eComparemo.com
