There are several convenient ways to help repay outstanding debts. However, there is no doubt that debt can be a stressful aspect of daily life. In fact, the total household debt in the US in the fourth quarter of 2022 was $16.90 trillion.
While your savings may help tide you over, many people do not have the luxury of a savings account. Some people put money aside for emergency situations like sudden unemployment but, again, many households simply don’t have room in the budget for this.
It can be stressful worrying about keeping on top of monthly loan repayments. With that in mind, we have created a list of creative ways that you can save money so that you are able to repay debts.
Creating a Budget Can Reduce Debt
Creating a budgeting plan has many advantages when it comes to helping to repay debt. If you are finding it hard to save enough money to put aside each month, you may need to look at reducing your outgoings. Those who struggle with money management may find this the most challenging part of trying to repay their debts.
Looking carefully at your income and outgoings is essential. You need to work out which costs are necessities, allowing you to cut unnecessary items and reduce your outgoings. This may include cancelling monthly entertainment passes, eating out less or buying fewer clothes. Once you can start to save yourself money, it will become easier to meet repayments on time.
Creating a budget allows you to closely monitor your outgoings so that you can find ways of trimming back. You will almost always find unnecessary expenses when you write down all the ways in which you spend within a month.
Many people adopt the 50-30-20 rule. That is:
- 50% on necessities
- 30% on wants
- 20% on savings.
It’s a good rule of thumb but can be adjusted depending on your specific financial situation.
If you are inexperienced at creating a budget, consider researching the many different, often free, budgeting apps and websites that are out there. They will help you set up a sustainable budget when you may need it most.
Check your Utility Providers to Reduce Spending
Energy, internet, heating, phone. These expenses are very hard to avoid. But when you are looking to repay debt, it is more important than ever to know that you are getting the best deal from your service providers.
Check with your service providers. See if you are able to get a better deal on your service. If you can’t, consider researching other providers that might offer a similar service at a lower price.
It is also important to know exactly what you are paying for when it comes to these bills. For example, you may find you are paying for premium wifi when you really just need the most basic service. You may find that you are paying for a tonne of unnecessary extras when it comes to your phone, and that you can get by just fine without them.
Do your research when it comes to your providers. By doing so, you may end up saving a lot of money that you can use to repay your debts.
Food Budgeting to Repay Debts
Food is essential, no getting around that. Expenditure on food and groceries is one of the most necessary, but also the most flexible parts of any budget. So if you are looking to save money to repay debt there are many creative ways to save on your food expenses, including:
- Finding coupons and deals on the groceries that you buy. There isn’t a supermarket out there that isn’t offering a deal on one item or another
- Cut out any unnecessary items that you might previously have impulsively picked up (looking at you, candy bars.)
- Be smart about what you cook. There are a whole host of recipes out there that cater to individuals and families on a tight budget.
There are many ways to save when it comes to grocery shopping. It may be entirely necessary, but it is also the easiest part of the budget to adjust when looking to save money in order to repay debt.
What Else Can I Do to Repay Debt?
If you are still struggling with debt repayments, remember that there are nonprofit credit counselors, bankruptcy attorneys, and legal aid centers that can help you. Get proactive in dealing with your debt today and begin to plan for a better and brighter financial future!
If you have a lot of debt on the go, you want to avoid high cost loans or bad credit loans, since this can come with high interest rates and contribute to the cycle of debt.
If you are having financial difficulty, you should speak to a professional who will be able to help. Also be sure to read our guide on 5 simple ways to save money.