The United States is one of the most indebted countries in the world. In fact, according to a recent study from Northwestern Mutual’s Planning & Progress Study, people who have debt average around $23,325. That doesn’t include mortgages.
It can be incredibly difficult to get out of debt when you’re living paycheck-to-paycheck and trying to make ends meet every month. However, there are ways that you can start saving money today and see your debts decrease over time with a few small changes. Melissa, a beauty enthusiast and blogger has shared 4 tips on how she got out of debt. These tips have changed her life, and it could do the same to you!
Use a Cash Envelope System
By using cash to pay for your expenses, you’re less likely to overspend and blow up the budget. Plus with this method, if there’s an emergency or sudden expense that pops up it doesn’t have as much of an impact on your monthly spending because you’ve already spent from the month before.
Using a cash envelope system allows you to track your spending and keep yourself accountable at the same time. It’s an old-fashioned system, but it works!
While you’re at it, you may want to take it to the next level and stop using credit cards unless you’re able to for them off every month. This one might be a little difficult for people who are used to using credit cards, but if you don’t want to get deeper in debt it’s important that you stop spending money on them unless it’s absolutely necessary. The main reason behind this is that credit cards are one of the easiest ways to overspend. It’s hard to resist makeup sales when you’re able to just swipe a card and get what you want. So if you stop using them for everyday purchases, or at least put your spending on hold until everything is paid off, it can be much easier to see your debt go down instead of up every month.
With cash, you can’t spend more than what is in your wallet, so it helps keep impulse purchases down and gives you time to think about whether or not an item is really worth buying right now.
Make a Plan to Pay Off Your Debts
The first step to paying off your debts is knowing exactly how much you owe. After you figure out the total, make a plan on how long it will take for each debt to be paid off and how much extra money you can put towards them every month.
Some people like to use the “snowball method” of paying off their debts where they pay off the smallest debt first and work their way up, but you can also use the “highest interest rate method” or even create a plan based on your income. At the end of the day, it all depends on your unique situation.
Using debt relief programs is another great way to get out of debt faster. Debt relief programs can lower your interest rate, help you consolidate your debts into one monthly payment, and even negotiate with creditors on your behalf so that they take a cut in the amount you owe them and decrease the time it takes for everything to be paid off.
This is extremely helpful for those who are living paycheck-to-paycheck and finding it difficult to put extra money towards their debts. There’s no shame in using debt relief services, and it could be the extra push you need to finally start seeing your debt go down. Click here to learn more about debt relief.
Keep a Separate Savings Account
In order to pay down your debt, you need an emergency fund. In addition to that, once that is fully funded it’s important to start saving for retirement and the future in general. Having multiple savings accounts set up specifically for these different goals can help you stay more organized and keep track of what you’re saving for in the long run.
If you have a lot of debt, it’s important to take care of that first before putting money towards any savings goals. But once your debts are paid off and everything is set up correctly, you can start saving more than just minimum payments every month.
Cut Unnecessary Expenses
It’s time to get real about your expenses and see what you can cut out of the budget. Think about ways that you could make your monthly payments lower if possible, like switching insurance companies or getting rid of certain subscriptions (especially ones that aren’t worth it).
Do you have a monthly beauty subscription box with products that often end up in the trash? Or maybe you have a gym membership but don’t even go to the gym. All of these are things that can be cut and will help make your debt payments lower each month, which in turn makes it easier to pay them off faster!
There’s no need to feel stressed about credit card debts when there are so many ways for women like yourself to get out of debt. With a few simple changes to your daily routine, you can start seeing progress in no time!
Using a cash envelope system, stopping the use of credit cards unless necessary, setting up multiple savings accounts, and cutting unnecessary expenses are all great ways to get out of debt. Asking for help from debt relief services is also a great option to consider, and there’s nothing wrong with it. At the end of the day, it’s important to remember that the sooner you get out of debt, the better.
For more information on getting out of debt and saving money, you may check debtconsolidation.com.