Have you ever driven by a home with a for sale sign and said, “Wow! I love that house!” but then, think to yourself, “I wish I had savings for a down payment”, or “what I wouldn’t give to pay those credit cards down”? There are some small steps, with significant outcomes, that could save you hundreds of dollars per month that could be applied to your savings account or paying down credit card debt – or both!
Paying off debt doesn’t have to be stressful.
Step 1: Review Your Spending
The first and most effective step is to review your last two months of bank statements. Identify all the monthly debt payments you are making. Start with creating a list of debts, smallest to largest. Place that list in a visible spot in your home. Make your monthly payments as required on all credit cards, however, place a larger focus on paying off the smallest balance first. Minimize usage or do not use credit cards at all for faster results. Cross each credit line off as you pay them down so you can see your progress. But once paid off, don’t cancel these credit lines – they hold significant value with regards to your credit score.
Step 2: Review Your Subscriptions
The second step is to create a list of monthly subscriptions on autopay. Rank each of these subscriptions as “must-have” to “I don’t even use this” or “not necessary”. Consider canceling automatic subscriptions with redundancies such as Netflix, Hulu, app renewals, car wash services, massage services, gym memberships, or other services where you’re not utilizing their full value. I have helped people identify between $250 – $365 per month that was spent on subscriptions that were not being fully utilized, or worse, they didn’t even remember they had them in the first place.
Step 3: Review Your Current Bills
Lastly, review your household bills such as cable, electric, mobile phone, internet, and insurance. Evaluate options to reduce or eliminate a bill or two. Often canceling cable and retaining a good internet service program can save nearly $100 or more each month. Cell phone services have great programs that may save you on your program selection. Additionally, shop your home and auto insurance. Often, there are considerable savings that have not been offered to you as a regular customer or by bundling.
Small Savings Add Up!
It’s often the little things that add up to BIG savings. Eliminating or reducing the coffee shop visits or negotiating your insurance bill can truly add up to significant savings. Reroute those funds by paying off debt and divert money to your savings account rather than 100% of your paycheck to one account. In no time, you will have money in savings, minimal debt, and the ability to finance a major purchase with ease.