How to Manage Your Money While Paying Off Debt

Thursday, June 6, 2019, 6:00 PM | Leave Comment

When it comes to finances, everyone has their own preferred way of managing them.

If you’re in debt, you may be wondering how to build up savings while freeing yourself from high interest rates and payments.

It’s not always easy to climb out of the debt hole, but it can be done.

More than anything, if you’re actively trying to pay down/off debt, you have to be realistic about your lifestyle during the process.

You will have to make sacrifices and work a bit harder to achieve your goals, but the good news is, you will achieve your goal!

If you’re not sure where to start, here are a few tips to help you both pay off debt and be able to live a fun life at the same time.

  1. Consider a Side Hustle For “Fun” Money

    If your day job leaves you pinching pennies at the end of the month after all the bills are paid, consider taking on a second job to help free up some money. This doesn’t mean you have to stay up all night bartending to make ends meet (unless you want to, of course). You can find freelance or consulting jobs that are flexible and pay well.

    If you’re crafty, consider selling something unique on a website like Etsy. Once you have figured out what that side hustle is, adjust your budget to account for the average monthly income you’ll get and allocate some of it to fun things like going out to eat, seeing a movie, or putting towards a vacation fund.

  2. Look for Creative Ways To Reduce Bills

    Unlike credit cards, you typically can’t just switch utility providers or negotiate monthly fees. Still, things like electricity, water, and heat are based on consumption so you have some control over how much you spend every month.

    According to House Method, you should sit down and look at each of your utility bills and determine where you can cut costs. Maybe you take less relaxing baths every week or avoid filling the kiddie pool up multiple times a weekend to cut water usage. Small sacrifices like this will add up to big savings over time and help you get out of debt quicker.

  3. Don’t Deprive Yourself

    Just like depriving yourself of good food when you’re on a diet often leads to a binge, trying to live a crazy-frugal life while paying off debt will eventually wear you down and leave you reaching for your credit card again. To avoid this, create little milestones for yourself along your debt journey and use them as an excuse to reward yourself. Maybe you give yourself $100 to splurge or buy a pair of shoes you’ve had your eye on. Whatever it is, keep it reasonable but satisfying.

  4. Create A Budget That Works For You

    It’s no secret that a budget is a big part of responsible spending. However, it’s important to be reasonable when you’re making it. If, for instance, you know that you love ordering pizza on Friday nights, make “pizza” a line item in your budget. This assures you that you have the money set aside for this activity so you won’t dip into your debt money, or worse, grab a credit card to pay for your usual treat.

    Consider what you “need” and what you “want” every month and be realistic about where you can cut costs. Just like you shouldn’t live above your means, you shouldn’t force yourself to live a life of Ramen noodles for every meal if you don’t need to.

  5. Tackle One Debt At A Time

    If you have five credit cards or loans, it may be overwhelming to think about paying them all off at once. Instead of looking at the big picture, come up with a plan that allows you to pay minimum payments on all of your debts.

    There are a variety of plans out there that can help you do this, such as the snowball payment plan or high-to-low interest rate. The idea is that you’ll see one debt paid off which will boost your confidence and help you to continue to pay off the remaining debt.

It can be challenging to pay off debt, but it’s possible to do it in a way that works with your lifestyle and leaves you feeling fulfilled instead of drained. Small steps add up to big leaps when it comes to money, so get creative and figure out a plan that works for you.

Throw us a like at Facebook.com/doable.finance


Post a Comment on Content of the Article

 

This is not a billboard for your advertisement. Make comments on the content else your comments would be deleted promptly.

CommentLuv badge