The first step to paying down your debt is to create a plan. Consider your debt as a symptom, and make a treatment plan to get rid of the disease.
But what happens once you’ve started working on your debt repayment plan? Well, now that you’ve got a plan to get out of debt and you’re making progress, it’s time to take it up a notch. What if you could speed up your progress by saving an extra $200 a month for debt repayment?
The good news is that, most likely, you can. Here are 3 things anyone can do to save an extra $200 each month:
1. Avoid the Budget Killers
According to Mediascope, 40 percent of consumer spending is impulse buying. Additionally, the average person spends $114,293 over a lifetime just on impulse purchases. Your impulse buys — even if the items are “on sale” or a “bargain” — can cut into your ability to pay down your debt much faster. We also know that stores use psychological sales techniques to increase your likelihood of impulse spending.
Other budget killers are seemingly-small but frequent purchases that can add up over time. Drinks with friends, regularly eating out at restaurants, shopping at the mall, and making little everyday purchases can make a big impact on your budget.
Be conscious of your spending, and catch yourself when you realize that you are buying on impulse, or engaging in an activity that isn’t necessary. Remember: Debt pay down is your priority right now.
2. Cancel Those Fun Subscriptions
While you’re getting out of debt, can you live without the cable, magazine subscriptions, gym memberships, and unlimited 4G data streaming? For most of us, the answer will be “Yes.” When you get right down to it, these are superfluous items that can cut into your budget. You can find half of your $200-extra payment just by canceling a $100-per-month cable subscription. (Plus, there are some alternatives)
Think about low-cost ways to replace those subscriptions. Can you get your news and entertainment online, without a magazine subscription? There are plenty of ways to exercise at home without the pricey gym membership. Be realistic about the monthly charges that you incur due to subscriptions. Cancel them, and but the savings toward debt reduction.
3. Plan Your Meals and Buy Low-Cost Ingredients
You might be surprised at how much you are spending on your meals because you don’t have a meal plan. When you don’t have a plan, it’s likely that you will just grab something on the way home, or order takeout or delivery. This is almost always more expensive, on a per-serving basis, than creating your own meals using low-cost ingredients.
Look ahead, and plan your meals for the week. You can use sales fliers and coupons to help you plan your menu. Create a weekly meal plan based on what you can get on discount on the store. Don’t forget to consider busier than usual days. On days when I know that I will be busy, I use the crock pot. It’s easy to put together a low-cost meal that is ready for me when I get home.
Finding the extra money to supercharge your debt pay down efforts doesn’t have to be difficult. All it takes is a careful examination of your financial situation, and a little planning ahead. Cut out some of the regular expenses that are holding you back, and put that money toward your financial freedom.
Credit for Image 1 Surat Lozowick