Can you really save money if you have a lot of credit card debt and other bills?
While it may seem impossible to build a nest egg with all your other financial obligations, there are things you can do to reach your savings goals.
Review: Carefully review your income and spending to determine exactly where your money is going. Do whatever you can to trim your expenses, including cutting services you don’t need or use, switching utility plans, cutting out impulse shopping trips, etc. The money you cut from your budget can go toward debt reduction or savings.
Consolidate: Consolidate credit card debt and other bills to cut down on interest charges. Paying less interest over time allows you to allocate more income to paying down debt or adding to savings. Obviously, once your debt is paid off, there will be more money available to boost savings accounts.
Get Counseling: Use a debt counseling service to get your finances back on track. If you’ve done everything you can to save money and pay off debt with little results, you may need help. Debt counseling can help you learn to budget and manage your money better. Look for a reputable debt counseling firm that clearly describes its services and fees before you sign up.
Negotiate: Negotiate a debt settlement with creditors to get a lower payoff amount. Generally, credit card companies won’t begin to discuss a debt settlement program until you’re at least two months behind on payments.
Save: Once you have paid off credit card debt and other loans, redirect money that previously went toward debt payments to your savings. Set up automatic deductions so that part of your paycheck goes directly toward your savings goal.
Having a lot of debt can keep you from reaching savings goals. Debt reduction should one of the first steps toward building a savings. Once you’ve knocked out that debt you can get down to the real business of putting away money for various savings goals.
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Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno. She enjoys writing informative articles about debt management and personal finance.