With all of the books, youtube videos, and constant content that has spammed us about this topic, Your NC Community Credit Union is here with a list of tips that will help you pay down your debt for good.
We know why you are here. You saw the title of the blog, and you grew curious. Maybe you’re a college student, months away from graduating, perhaps you just landed your first career job, or maybe you have a growing family in the process of purchasing your first home. You are savvy with money, working on cutting your expenses and increasing your income, ultimately paying down your debt and living a debt-free lifestyle. You are also human, and sometimes your spontaneous behavior sabotages your desire to save money. Trust us when we say, we all have been in your shoes and are continually trying to find ways to trick ourselves into saving money and paying down our annoying debt.
With all of the books, youtube videos, and constant content that has spammed us about this topic, Your NC Community Credit Union is here with a list of tips that will help you pay down your debt for good. With anything, consistency and patience are critical components in seeing progress. Keep positive, and let’s get into our list of tips and debt busters!
Live Below Your Means
Sounds easy, right? The truth is we are bombarded with ads and expectations to live like the Jones daily. It’s easy to get throw off your path to a debt-free lifestyle by our urges to spend and spontaneous behavior. What we must understand and continuously remind ourselves is those material items do not equal happiness. Just because we see our friends and family buying new cars and clothes, or scroll past our favorite Youtuber with the latest technology does not mean they can afford it.
Keep reminding yourself what matters most, what your goal is, and stick with it. If helpful, post sticky notes around the house using encouraging debt-free quotes for motivation. Whatever it takes, keep your focus, and be steadfast on your debt-free journey.
Latte Method
The key to successful saving is cutting out the small price tags that potentially add to significant expenses. For our coffee lovers, add up how much money you spend on coffee a month at your favorite shop. Then multiple it by 12. A four-dollar cup of joe can end up costing you over a thousand dollars a year. The Latte Method is simple. Instead of spending your money at the coffee shop, simply make your coffee at home and pay yourself for it. Add what you would spend on coffee to a savings account and watch it grow!
Apply this method to anything you can do at home for free or at a lower cost. If you usually go out on a date to the movies and it cost you $12 a ticket, add the $12 to a savings account and stream a movie at home instead. You will be amazed at how much money you will be saving by using this DIY method. When you have reached a specific goal in your savings, take the chunk of money, pay off a bill, or apply it to your student loans!
Prioritize Your Debt
There are many financial gurus with their unique expertise on how to pay down your debt. If you are a fan of Dave Ramsey, then you are familiar with his debt-free plan and how he recommends paying off the lowest balance first. If you follow Suze Orman and have skimmed through her books on debt, then you are familiar with her plan that suggests paying off the highest interest rate first.
If you ask us, paying off your debt and finding what motivates you to do so is a personal choice. Maybe it’s more convenient for you to pay off your highest balance with the highest interest rate. Perhaps if you tackle the smallest debt, you will find the motivation to continue the process with the remaining debt. Find what works for you, and stay motivated!
The Old School Envelope
Not sure how many of you are still using envelopes to send mail off, but here is another way to get your money’s worth. You may have heard of the Envelope Method; if not, to put it plainly, it’s an old school way of helping you stick to your budget. To help keep the momentum, you can use the envelop method to keep on track and prevent spending money spontaneously. For example, if you usually spend money on food and gas, set two envelopes aside with the amount you will need for the week. Once the money in the envelope is gone, you can no longer spend any money. Use this method to continue your saving spree and inch closer to your debt-free lifestyle.
Inconclusion, remember that you are not alone. There are so many of us with the same goals and struggles. We all want to be debt-free and spend more of our money on things that matter. It’s important to note the difference in being frugal versus being cheap. Don’t live your life, torturing yourself to reach your goal of being debt-free. Enjoy the moments that count and know that you do not have to eliminate the things you enjoy, but try to find ways to enjoy them for less money. We hope these tips will lead you to a more fulfilling life, filled with moments you can enjoy without the thought of debt. Debt-free is possible, and we know you are on your way!