A lot of people place too little importance in saving. In fact, according to a 2017 GoBankingRates survey, more than half of Americans have less than $1,000 in their savings account.
More than half of Americans have less than $1,000 in their savings account.
When you’re not earning enough, have little money for splurges, and a ton of debt saving seems like the least important thing.
But saving is one of the best things you can do to improve your finances today and in the future!
Want to know how to save while paying off your debt? Read on to find our top tips!
1. Change Your Money Mentality
Emotion has got a lot to do with how we spend our money.
Most of us don’t save because we feel we need the money now more than in the future. We don’t save while we’re paying off debt because we feel we should pay off our debt first before putting money away.
This can easily be explained by our emotions towards debt and saving. While we regard saving as a choice, we think of debt as an obligation. So if you want to start saving, you have to change your mindset about money.
If you start treating saving as an obligation, you might find it easier to cut your unnecessary expenses and put more money towards your savings.
It will be a lot easier to save money if you start treating saving as an obligation not a choice.
2. Earn More Money
Earn more money by starting an online business as a side project.
To get out of debt, you have to find ways to increase your cash flow. Whether it’s asking for a well-deserved raise or starting several side hustles, earning more money will help you save more cash while you’re also covering your monthly debt payments.
Debt can keep you shackled towards working a job you hate but if you use your time well, you can do several fulfilling passion projects that will help earn a little bit of “spending money” while helping you to save at the same time.
Have a full-time job and looking for passion projects ideas? Try these:
- 1If you love writing and feel you’re ready to share your knowledge and passion about a certain topic, create a blog about it! People all around the world get paid every day to write about stuff they love!
- 2Want to try your hand at becoming an e-commerce business owner? Start an online store. It’s never been easier to sell stuff online!
- 3Have lots of valuable clutter at home? Sell these unwanted items online on sites like e-bay and Craigslist!
3. Set Saving Goals
The best way to tackle debt while saving money is to set a savings goal.
Having a goal makes you more focused and motivated to stay on track.
Do you find it hard to save? There’s an easy solution for it: automate your savings! This makes it far easier to first put money in your savings account and leave out the rest for spending.
Having clear and realistic goals and automating your savings will ensure you stay on track.
How to set a savings goal:
- 1Identify your goal. (ex. Save $5000 for medical emergencies or save $10,000 for renovations)
- 2Plan how much you should save each month to reach your goal.
- 3Identify, prioritize, and make adjustments to your budget on a regular basis to stick with your goal.
- 4Set up an automatic money transfer so you don’t even have to think about it!
4. Create a Realistic Budget
Paying off debt and saving can easily be done if you follow a realistic budget. With a budget you can clearly visualize how and where you’re going to spend your money.
Paying off debt and saving can easily be done if you follow a realistic budget.
You can also prepare and plan ahead for important expenses that might derail you from saving or making your monthly payments. Part of creating a budget is tracking your spending. You need to know where you’re putting your money to analyze which expenses can easily be cut to increase your savings.
Anxious to get started but don’t know how? Here’s a 4-week guide to setting a realistic budget.