It would seem as if getting out of debt and saving are mutually exclusive, either you do one or the other, for how can you pay off debt and save at the same time. Well, for one the methods you apply to get rid of your debt can serve you well as lifelong lessons in saving.
Start Keeping Records
Remember when you were a teenager and kept a diary where you wrote all the important things that happened to you every day? Now that you’re a grown-up with a grown-up debt, you also get to keep a record, and this time a useful one, like your earnings and expenses. Most people fall into debt because they have no idea of mow much they actually spend. By keeping track you’ll see where you’re overexpending, and by cutting unnecessary expenditure not only will you ward off debt but also start saving.
If your spending follow a ‘first come, first serve’ logic, meaning that you spend money on the first things that comes to mind, often known as impulse buying, then you need to rearrange your priorities. Some things are set in stone; shelter, food, emergency and retirement funds, electricity and water bills, these are things you cannot afford to do without. The new iPhone 5? That’s an unnecessary luxury, especially if you already have the iPhone 4.
It is also a good idea of breaking down your debt so as to have a better idea of what you owe to whom. Maybe you don’t even know where to start; by categorizing your debt you’ll have a clearer picture of what’s urgent and what can wait. Remember you don’t have to pay all of it at once. For instance, if you have more than one credit card debt, you can start paying off the one with the higher interest rate, and then work your way down.
Take A Shot At Lowering Your Credit Card Interest Rate
This may sound easier said than done, but you’d be surprised to know that your credit card company may be as interested in this as yourself. In any case, it doesn’t hurt you to find out, and all it takes is a simple phone call.
Look For Additional Jobs
If you have more time than money, then you could try to apply for a second or third job. For example, you could become a mystery shopper, just to name one option. Additional income is a new source to pay off debt, and a new source to save from as well.
Don’t Delay Payments
If you fall behind in your scheduled payments, you are at risk of being charged further interest. Punctuality means that your debt will not grow bigger than it already is.
Paper, Not Plastic
By charging every purchase you make to your credit card, you may be setting yourself up for later debt. If you pay for things in cash, then that’s it, outta sight, outta mind.
Count On Discounts
Now is not the time for foolish pride, if you want to get out of debt and save at the same time, start taking advantage of products on sale and discounted items; use coupons if need be, remember you need to make the most out of every penny.
Change Your Lifestyle
If you eat out often, then consider learning to cook; if you go to gym, think about running in the park of lifting weights at home instead. Don’t live beyond your means.
Last But Not Least
This almost goes without saying, but on the other hand it can’t be stressed enough; a sensible budget is a twofold attack in order to avoid debt, get out of it if you’re already in, and save; for the present and for the near and distant future.
This article is provided courtesy Pocket Savvy, a personal finance website, with the best money saving tips and financial resources to help you improve your money management skills. Follow Pocket Savvy on Twitter and connect on Google+ and Facebook.