Top 16 tips for saving money and paying your debt
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Imagine working as much as you can to try and save money or pay off debt, but you never seem to have enough cash. Before you resort to living in debt, consider a few saving tips.
The right tips can help you even on a small income, so you can meet your goals. Then, you won’t have to deal with debt and financial problems for the rest of your life.
Read on to learn more.
1. Set Goals
First, you should set goals for saving money and paying off your debt. Take a look at your income, overall expenses, and loan balances to get an idea of some good goals.
Make sure your goals are specific, measurable, attainable, relevant, and time-based (SMART). SMART goals can help you stay on track better than a more general goal, such as to save money.
You may decide that you want to save $1,000 by the end of the year. That goal is specific and easy to track, so you will know when you reach that goal or if you may need to work a bit harder to reach it.
2. Use a Budget
Another one of the best ways to help with saving money and paying debt back is to use a budget. If you’ve never used a budget, you may need to guess how much you spend on certain things, like entertainment.
After a month of tracking your income and expenses, you should have a good idea of your current spending habits. Then, you can figure out if you want to save more of your money or if you’re happy with your current saving rate.
If you want to save more and pay off a payday loan or your auto equity loans, you can decide how to change your spending. Without a budget, you may never know how to cut spending to prioritize other things.
3. Prioritize Necessary Expenses
When saving money, you should focus on the expenses you can’t cut or reduce. These include things like your rent or mortgage on your home and any utilities that you pay.
You should also consider the average amount of money you spend on transportation and groceries. You may be able to lower those expenses, but you still have to spend some money on them.
Putting these expenses first will ensure you have the money you need to live. If you don’t have the money, you may need to get a loan for now and pay that back when you can.
Then, you won’t have to risk losing your home or not being able to eat.
4. Cut Unnecessary Expenses
After you make room in your budget for necessary things, consider what you don’t need to spend money on. For example, you may like going out to eat, but you can save money by cooking at home.
You might also decide to stop going shopping or seeing movies in theaters. If your rent is too high, maybe you choose to look for a roommate to help lower your living expenses.
When cutting expenses, you can choose to cut them for a few months, especially if you have a small amount of debt. Or you may decide to cut them until you can save enough money to feel financially comfortable.
5. Split With a Friend
If you don’t want to cut expenses completely, consider splitting certain things with a friend or relative. You can still go out to eat occasionally, but maybe you split your food with a friend.
Or maybe you eat half and save the rest of the meal for lunch the next day. When splitting food with someone else, you’ll each pay less. And if you save a meal for later, you can pay less per meal.
Another option is to carpool to work with a friend or colleague. This is a great option if you live near a coworker or if you and your roommate or partner work close to each other because you can save on gas and car maintenance.
6. Watch Your Subscriptions
An easy option for saving money is to check what subscriptions you pay for each month or year. Consider if you’ve used the subscription in the past few months and cancel anything that you don’t use anymore.
Some subscriptions are cheap, but they can add up month over month. If you don’t use the service, you shouldn’t continue to pay for it, and you can always resubscribe later if you do decide to use the service.
But canceling, for now, can help you save a bit of money to help with paying debt back or other savings goals. Then, you won’t have to cut as much from expenses you enjoy and use.
7. Automate Your Savings
Another excellent saving strategy is to automate your savings. People with traditional banks can do this by scheduling a transfer from their checking to a savings account or having an employer split their direct deposit.
When you don’t have a bank, you may not be able to use technology to automate savings. However, you can make it part of your weekly or monthly routine to save money.
Maybe you have a safe place where you store your extra cash at home. Set a reminder on your phone to help remember to save money regularly, and you can avoid spending the money you want to put towards debt or an emergency fund.
8. Automate Your Bill Payments
You should also find ways to automate bill payments, especially if you want to pay off a loan. Automating these payments means you don’t have to worry about forgetting and then missing a deadline.
If you miss a deadline, you may have to pay more in the form of interest or a late fee. Scheduling your bill payments can help you save a lot of money over the course of loan payments, and it can take a lot of stress off your back.
Even if you can’t use technology to send the payments for you, you can set reminders. Then, you’ll know you need to get some money orders and send off the payments before they’re due.
9. Start With Higher Interest Rates
If you have multiple loans you need to pay off, you may want to focus on one first. You can make the minimum payments on the others, but you may decide to put extra savings toward one loan to get rid of it sooner.
When deciding which loan to focus on, consider the interest rates. In general, student loan rates are much lower than credit card loans or auto loans, so you may want to pay off a card or car loan first.
You can still work on paying back your student debt, and interest will build up. However, the interest won’t be as high on a student loan as it would be on an auto loan or credit card, so you may save money overall.
10. Save a Specific Bill
An easy saving tip you can follow is to save every bill of a specific amount that you receive. For example, you may decide to save every $5 bill you get back in change, from a friend, or from a financial institution.
This won’t help you save a ton of money in a short period. But it will help you save money slowly, which is nice if you don’t have a huge income.
By the end of the year, you may be able to save a few hundred dollars by keeping all of the $5 bills you get. For example, if you get a $5 bill twice a week, you’ll be able to save 104 $5 bills per year, or $520.
11. Contribute to an IRA
Maybe you have some extra money lying around or your income is a bit higher. An excellent way to save money is to put the extra cash into an individual retirement account (IRA).
You don’t need to have an employer to start an IRA, and you can put a little bit of money in or max out the account. If you use a traditional IRA, the contributions will be pre-tax, so you don’t need to pay income tax on that money.
That can be an easy way to save money at the end of the year. You can then keep the money in the account until you retire, and you may be able to make a decent amount in interest.
12. Make a Grocery List
Cooking at home can be an excellent way to save money compared to eating out. However, you should make a grocery list to keep from spending too much money at the store.
Go through your pantry and fridge to see what items you have and what you need. Make a list of the items you need and what you need to make the meals you want to make.
When you get to the store, stick to the list and avoid temptations like candy and snacks. Sticking to the list can help you keep from overspending, so you can maintain a budget.
13. Join a Loyalty Program
Another great way to save money at the grocery store and in general is to join a loyalty program. Many grocery stores and other retailers offer a special account for regular customers.
You can use your account to get discounts on certain items, such as produce or other ingredients at the grocery store. Some programs also offer a free salad or meal after you spend a certain amount or go there a certain number of times.
If you visit a particular store often, you should join its loyalty program if there is one. Then, you can put the money you save into an emergency fund or your debt repayment fund.
14. Use Your Student ID
When you’re in school, you should keep your student ID in your wallet. Ask stores and venues if they have a student discount to see if you can save money there.
Some places offer 10 or 15% to current students, so you may save a lot over time. Of course, you should only do this when you’re a student, so don’t lie after you graduate.
Another great way to get discounts is if you are or were in the military. Some stores offer a military discount if you provide proof of your military or veteran status, and you can save like a current student.
15. Start a Side Hustle
Maybe you’ve tried every saving strategy possible but can’t seem to have enough money. In that case, you should find a way to make extra money, such as by starting a side hustle.
You can work on your side hustle during your free time, so it doesn’t have to cut into your current work schedule. As you bring in money through your extra gig, put it in a savings account or pay off more of your debt.
Don’t forget to also save 20 to 30% of your earnings for taxes so that you can comply with the law. Then, you won’t have to pay a ton in late fines to the IRS.
16. Ask for a Raise
If you don’t want to work more or start a side business, consider if you can get a raise. After a year or so, you can ask your boss if they’re able to pay you more for your work.
Many companies are happy to pay their best employees a bit more to encourage them to stay. Then, you can earn a bit of extra money without having to work more than you already do.
Even a small raise of $0.20 or $0.30 per hour can add up after a month or year. Assuming you work 40 hours a week, you’d earn an extra $416 per year before taxes with a $0.20 raise.
You may not be able to get a raise, but it’s worth asking. If your company can’t pay you more, you can look for a different job with better pay so that you can save more.
Which Saving Tips Will You Use?
Saving money can be difficult, but it’s crucial if you want to pay off debt, buy a house, or meet another financial goal. Be sure to consider small things, like joining loyalty programs, and large things, like cutting back on rent.
Then, you’ll have more money to add to an emergency fund or to contribute to your next bill payment. Soon enough, you may have plenty of money to cover your expenses.
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