This article is a compilation of tips and tricks I used to get myself out of over 75,000 in debt. I didn’t do it quickly. But slow and steady wins the race. Here are a few things that worked for me. I’m not a fan of articles that talk about thousands of dollars of debt paid back in short amounts of time. We all don’t fit into those categories of finance and life situations. These tips work for everyone in any circumstance.
1. Refinance. I had a huge student loan that the interest was killing me at 13%. I had tried to refinance for years but always needed a co-signer and did not have anyone that could do that for me. When asking around, I found Laurel Road. If you end up refinancing with them, use this link to get started and $80 to your account when you sign up!
2. Snowball payments. If you haven’t read Dave Ramsey, you should. I don’t think all of his information is useful for those in extreme debt but he does have a tip I’ve been stealing for years. It’s the snowball effect. Basically, you start paying off your smallest bill. All the while only paying minimums on everything else. Once that bill is paid off, you take the amount you were paying to the first bill and add it to the next higher bill. And you just keep rolling those previous payments, now paid and done, into the next bill you have. I’m not sure why I never thought of this but it’s a great idea. You are already spending the money but now using it to pay down bills even faster.
3. Coffee addiction. A hard habit to crack. But let’s say you get the most frou frou drink at Starbucks which probably costs you close to $7 a day. You do this only on the weekdays which average about $35 a week or $140 a month. That’s $1680 a year in just coffee! That’s not even including a sandwich or treat you probably also get. I don’t know about you but that’s a lot of debt to be paid off. I understand treating yourself every once in awhile but just think about how much you are actually throwing down the drain for something you can make at home.
4. Car payment. I never realized what a money pit a brand new car was until I went to buy a brand new car. Just driving off the lot, the car loses 10k in appreciation. That’s fricken crazy. If I were to buy the same car at a used lot, it would cost almost half of what a new car costs at a dealership. It’s just not worth it. You are better off going to an upstanding used car lot and getting basically a brand new car with a few thousand miles on it for almost half the price and with the same warranties. Just do some research. It will save you thousands. Some will tell you to buy the car outright. And for most of us, it’s just not an option.
5. Grocery Shopping. Everyone hates grocery shopping but it gets a little better when you can save money. I started couponing a few years back and what started out as something new to try, turned into an extreme couponing, teach my friends how to save money, extravaganza. Now I try to shop where I can use the most coupons or Aldi. Aldi doesn’t have coupons but they are so cheap and Trader Joe’s owns them. Most of their stuff is organic and the produce, meat and dairy are awesome. I really have nothing bad to say about Aldi other than sometimes you can’t find everything you need and another stop is needed.
6. Eating out & booze. One of the toughest for me. I LOVE to eat out and get drinks. But it does add up quickly. Even if you are trying to do it cheap. I remember adding up all my food costs for the month just from eating out and it was over $700. That’s a TON of money! I decided even if I spent half that amount a month I would save 4,200 a year! That’s crazy. And also, a ton of money to put towards debt. And being debt free tastes better than any food or drink I could blow my money on.
7. Ordering online. For those pet lovers out there, if you don’t have Chewy, get it. It’s an online pet food and supply store that, in my experience, is a lot cheaper than the big box and pet stores. You can put your order on auto-ship for whatever time intervals you need or just pay as you go. Either way it’s a significant amount cheaper than the store and it saves you a trip. Especially for those cat parents who hate carrying in 40 pounds of cat litter. I just order mine online!
8. Paying with cash. A lot of money gurus say this and it does hold truth if you have the self discipline to stick with it. Take out the amount of money you are going to allow yourself to spend on whatever it is you are doing. A fun night out, groceries for the month, gas, fun money, etc. I do try and do this but I’m just not as successful as I would like. I also hate carrying cash and feel my card is just easier. And if there is drinking involved, all bets are off. Even if I spent my ‘allowance’ for that day, I’m going to pull my card out to continue to have a good time. I clearly need more self-control but at least recognize it.
There are a few tricks that worked for me. Hopefully they can work for you too! Tailor them to your specific situation and much luck in your mission to be debt free!
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