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4 simple ways to save while in debt

Created: On July 6, 2011 @ 6:50 pm In

It may feel like you’ll never get your credit card debt paid off and begin to build a savings. However, adjusting some of your spending habits and reviewing your bill payments could help you escape the debt trap for good.

  1. Adjust your attitude. Even if you have a lot of [1] credit card debt it’s not the end of the world. Many people have found themselves harassed by creditors and confronting enormous mounds of debt but have managed to turn their situation around. By changing your behaviors and thoughts about money, you, too, can begin digging out of debt.
  2. Put together a debt reduction plan. It’s almost impossible to pay down a lot of credit card debt and other bills without a plan. The first step in a debt reduction plan should be to total up all the debt so you have a realistic idea of where you’re at. After that you’ll need to set up a budget that accounts for all household income and expenses. If you aren’t sure how to set up a budget, a [2] debt counseling firm may be able to help. Cut out or reduce any expenses that are not necessities.
  3. Prioritize your bills. There are certain bills that must be paid each month, such as housing costs, utilities and food. Consider putting those bills on an automatic bill payment plan to make sure they arrive on time each month. On-time payments will keep you from accumulating a lot of late fees or having interest rates jump, which can potentially save you hundreds–or even thousands–of dollars each year.
  4. Build a nest egg. If you find that tweaking your budget is freeing up more of your income, use some of it to build an emergency savings. Putting away $25 out of every paycheck is better than not saving anything. Also continue to make the payments on your credit cards and other bills, and divert any extra cash toward paying off one of your debts. After you get to a zero balance, roll whatever you were paying each month toward another debt. Before you know it you’ll be debt free and have a nice balance in a savings account.

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URL to article: http://www.debthelp.com/blog/2011/07/06/4-simple-ways-to-save-while-in-debt/

URLs in this post:
[1] credit card debt: http://www.debthelp.com/blog/2011/06/11/5-warning-signs-that-you-need-help-with-debt/
[2] debt counseling: http://www.debthelp.com/debt-consolidation/credit-counseling.html