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The very simplest way to start creating money to help accelerate debt payoff is to reduce what you already have. This could be as simple as using less water or making sure you turn off the lights when you leave a room. Or, you can be a little more proactive about it!
There is no bigger waste than something that is going unused. Especially something like a subscription!
If you are not taking full advantage of that gym membership, that local club or your Jelly of the Month club, then do yourself a favor and cancel the membership!
Consider how much you could accelerate your debt payoff if you weren’t paying these unused fees each month!
If you have serious debt that you are working to pay
Let’s say you have $10,000 in debt to pay off and your interest rate is 25% (what most credit cards charging.) This snapshot from CreditKarma.com shows that this debt will actually take 58 months (or 4 years and 8 months) to pay off and you will be paying over $7,000 in interest.
One of the biggest reasons people keep their savings while also trying to accelerate their debt payoff is because they are gaining interest on the money they have saved and are afraid to lose that money.
So take a moment to consider that you have a savings account with $10,000 in it. (The exact amount of debt you have to pay off.) If we take an average interest rate for a Money Market Savings Account at 1.85% in 5 years you will only have only made $968 on that $10,000. Here is a snapshot from Bankrate.com’s Simple Savings’s Calculator.
So what if you took that $10,000 and paid off your debt then began contributing $300 per month (your old debt payment) to a CIT Bank Savings Builder account with a 2.45% interest rate?
In 5 years you will have saved over $19,000 and made over $1,000 in interest. Learn more about the Savings Builder.
While emptying your savings can be a scary thing, it’s pretty clear to see how much better off you would be if you do. Putting large savings toward your debt does more than accelerate your debt payoff, it actually has the potential to allow you to save more money and make more money in interest as well!
Just think, in 5 years you have the potential to almost double your savings and be debt free.
Now while I say it may be a smart move to empty your savings if it can help you pay off debt, it is important to remember to always keep a $1,000 emergency fund savings to help you cover the cost of unexpected events. By doing this you create a safety net that will stop you from digging into credit card debt in order to fund your emergency. See 12 ways to save $1,000 fast.
Once you have a $1,000 emergency fund in place, put your savings on hold (if you were setting aside money each month) and begin putting all additional funding toward accelerating debt payoff.
Besides reducing your monthly bills and tweaking your savings, changing your grocery bill is the next best way to start finding more money to help accelerate debt payoff.
Take a minute and calculate how much you spent on groceries in the last 3 months. If you are not living on a budget, this number will most likely shock you.
I know before we were living on a budget it wasn’t uncommon for us to drop between $300 and $500 in one shopping trip for our family of 5. Now it’s more common for us to spend $100 per week for our family of 5.
Reducing the amount of money you spend on groceries each month can be stressful at first, but it can be a huge game changer when it comes to accelerating debt payoff and getting more money in your pocket.
Not great at planning meals or sticking to a budget? That’s ok! Check out the $5 Meal Plan! There are meal plans and grocery lists created by a busy mother of 4 and are designed to help you feed your family healthy, nutritious meals on a budget!
Chances are you have a little bit of junk you have been hanging onto for a little too long. So, maybe it’s time to hop on the KonMari train and start only keeping the items that spark joy and start selling the rest.
Places like Decluttr make it crazy easy to sell things like books, DVDs and video games. For everything else, I always recommend Facebook Marketplace!
That credit card interest rate is no joke! The good news is, there may be something that you can do about it. Here are some quick tips on reducing your interest rate to help accelerate debt payoff:
What Tom and I chose to do in order to pay off our high-interest rate credit card, was take out a loan with a lower interest rate. We used the loan to pay off our credit card debt and then proceeded to spend the next year focusing on getting the loan paid off as fast as possible.
If you have
If your credit score is drastically affecting your life and your ability to succeed, it may be worth it to see if you are able to dispute your debts. This could not only improve your credit score but has the potential to accelerate debt payoff as well.
To see if you qualify for credit improvement, check the Credit Assistance Network.
Credit improvement was something I had to do many years ago after moving from Arizona. During the process of moving, I had missed a car payment, but the bills were all being sent to my old address so I had no idea I had skipped a payment. Of
Luckily, after disputing the debt, I was able to get the late fees waived and got my credit score back to where it should be.
Once you have
If you haven’t heard of the Debt Snowball, check out my video where I break down how to start and what we did to pay off our debt even faster.
I am a big believer that if you want more money in your life, sometimes you have to make more money!
Personally, I started a blog and it almost single-handedly allowed us
One of the best and most freeing things you can do for yourself and for your finances is to start living on a budget! I know it might sound like a budget is more limiting and stressful, but in reality it is the best way to be more in charge of your money.
The budget we use is Dave Ramsey’s EveryDollar budget. This app is so easy to use and if you are budgeting with a partner, it makes it very easy for both people to view the budget on their devices.
The EveryDollar app is designed to help you live on a Zero Based Budget…which means you budget for every single penny. All you do is put in the money you earn as well as your bills and other budget items. Then the app does all the math for you.
See some of my best budgeting posts:
If you have been working at the same job for a long time, there is a good chance you have a lot more leeway than you might think when it comes to negotiating your pay. You just have to be brave enough to ask.
One of the best things you can do to help accelerate your debt payoff is set a goal for a finish date. You can do this by calculating out your payments and then maybe shaving a few months off just to give yourself a little extra boost.
I know that setting a finish date can make things really intimidating but consider that even if you don’t pay off your debt on the exact date you planned, you still may get it paid off a lot sooner than you originally would have!