Having debt can be stressful. Student loans, car loans and many others. We all know it. Luckily there are many ways to help you with paying your debts faster and in a smarter way. Today let’s talk about tips on how to save more money in order to allocate them towards your debt. Here are 30 tips to pay off your debt.
1. PUT EXTRA MONEY STRAIGHT TO THE DEBT
Got extra money from your parents? Received tax return? Earn some money from your side hustle? Great! Now I know it can be tempting to reward yourself and spend it on something nice but I have to stop you now. This is the moment when your life is going to change. This is the moment when you finally start paying off your debt faster and join me and others in our FIRE journey.
Believe me, if you spend this money, you will regret it. Just put it toward the debt. If it is too difficult for you now, then let’s make a deal. Take 10% of it and spend it however you like, but the rest goes straight to the debt repayment. Ok? Great! I am glad we reached the compromise.
2. BUDGET YOUR MONEY
That is a very important thing to do not only when you are in debt but also if you want to control your finances. You may think that you know where your money goes but you would be surprised by many expenses that you had no idea about or you just didn’t know you pay that much for coffee to go or for eating out.
Check out my other posts about the budgeting methods: zero-based budget, envelope budget and 50/30/20 budget. I recommend you to start with a zero-based budget. Yes, it’s the most difficult one in terms of time you have to spend on preparing it, but it is also great to acknowledge all the unnecessary expenses and cut them off.
3. CANCEL UNUSED MEMBERSHIPS
Let’s go through your memberships that you don’t use. I like to call this step „stop being Chandler” (do you remember the episode in which Chandler from FRIENDS couldn’t get rid of his gym membership? Well, I had a similar situation :D).
Ok, so let’s cancel everything that we don’t use. Oh, and I know you, you will keep scrolling down this post and by the end you will forget about it so please, take 5 mins, write down the subscription that you want to cancel and then read the rest of this post. I am waiting for you.
Oh and btw, let’s cancel all the streaming platforms and leave only one, ok? It’s not that you have the time to watch all of it, right? Let’s keep only your fav one (for me it’s HBO at the moment).
4. DO YOUR NAILS BY YOURSELF
I know that it is nice to have your nails done by someone else. Or your hair. Or massage. Or anything else.
But when you have debt, you should consider taking care of yourself at home. I’ve been doing my nails for years now and I do not only save money but also time, because I can do it at home while watching tv. I don’t have to go to the beauty salon.
5. DON’T TAKE ON ANY NEW DEBT
Unless it is for consolidation of the old one. But don’t even think of taking new debt to buy the newest iPhone or a better car.
6. GET A NEW HIGH PAYING JOB
Did you know that staying at your job for more than 2 years can be harmful for you in terms of salary? Of course not always but in general it is said that people who switch jobs every two years earn more money than those who stay at their current jobs for a long time.
I know what you think. How is it even possible? A loyal employee should be more valuable. Well. It is more complicated. I can recommend you reading this article on Forbes. And I can also tell you, from my own experience, that yes – what they say in this article is true.
7. GET A SECOND JOB
But only if you can. I don’t mean that you have to work so hard that you have no power to even rest or do anything for yourself. But if it is possible for you to sacrifice a few hours of your weekend to do babysitting or pet sitting or anything – then do it. 😊
8. KNOW HOW MUCH YOU OWE
It is hard to believe but some people don’t know how much they owe. Sometimes it is because they are just messy people and they forget or cannot really remember. But another reason is that they feel shame so they don’t even want to check it because it makes them uncomfortable. But I believe that we should be aware of these numbers to create a realistic plan to pay it off quickly.
9. NEGOTIATE WITH DEBT COLLECTOR
It is not always possible but it is worth trying. I know people who negotiated with banks a few years after they took a loan and yep, the bank agreed.
I know what you think. Why would the bank agree to negotiate with me if I am just a regular no-name? Well the answer is simple. Bank wants you to stay with it. They don’t want you to take a loan in a different bank and pay off your current debt. Because most often than not – they just won’t earn the same amount they would earn if they would have kept you with them.
10. NEGOTIATE YOUR SALARY
It is a good idea to negotiate your salary from time to time. Go to your boss, prepare what you want to say and see what happens. If you get it – awesome. If you don’t – you have nothing to lose. And at least you realize that maybe it is a good moment to look for a better job?
11. PAY BILLS ON TIME
If you want to save more money and put them towards your debt (or in general if you want to have control over your money) then you have to pay your bills online. Because what is the point of saving money here and there if you have to pay the interest because you forgot to pay bills on time?
If you struggle with paying your bills on time you may consider automating payments in your bank app or if it is not possible (because for example you pay a different amount every month) then create a notification on your phone or put it on your calendar. Just use the method that you would use to remember about dentist appointments. Or just pay your bills immediately after your pay day.
12. PAY MORE THAN MINIMUM
By paying more than minimum you can save a lot on the interest. But before you do it remember to check the terms and conditions of your debt, especially make sure that there are no additional fees for paying more than minimum.
13. CONSOLIDATE YOUR DEBTS
If you have more than one debt, you may consider consolidating it. What does it mean? In general it means that you connect all of your debts into one. The purpose of doing it is to have more time to pay it off or to have lower interest. But before you do it, do your own research. I am not a financial advisor and those are only the ideas so you have to analyze your own situation and check carefully all the terms and conditions.
14. SELL THE CLOTHES (OR OTHER THINGS) THAT YOU ARE NOT USING
There is absolutely no need to keep the things that you are not using. For clothes I am using Vinted or Facebook Market. For other things – it depends on what i sit but mostly Facebook market or some local website.
15. SHOP FOR GROCERIES WEEKLY
Groceries is a very long topic because apart from shopping weekly you can also consider buying only generic stuff, buying in bulk and meal planning. All of this will help you to save money on food.
16. SHOP SECOND HAND
Again I recommend Vinted and Facebook market. I have been buying used clothes for a few years now and I saved tons of money by doing that. I always buy only good quality clothes and in a good shape but it is still a lot cheaper than buying in shops.
17. SIDE HUSTLE
If you want to pay off your debts faster you may consider finding a side hustle that will help you to earn more money. There are fast and simple ways to do that but you won’t earn much money (such as surveys or market research) or there are more complicated ways but also more profitable (such as creating your own blog or social media profile or selling your DIY stuff). It all depends on your situation. I have some inspiration for you here. But you can also visit my instagram for more inspirations: @lanny.saving.money.
18. SPEND YOUR FREE TIME DOING NO-SPEND ACTIVITIES
There are so many ways to spend your time without wasting money. You can go for a walk, read a book, go running, explore your city, go hiking, watch a movie, do karaoke and so many other things. Use your imagination!
19. STOP OR LIMIT CREDIT CARD USE
You really don’t want to generate another debt or pay interest. It is always recommended to stop using credit cards while paying off your debt. You can come back to it and use it in a smart way after you get rid of your debts.
20. SWITCH TO PUBLIC TRANSPORT OR A BIKE
I don’t know why (or maybe I do but that is a topic for another post) but switching to a bike is my favourite tip. And yes, I know that for those of you who don’t have a bike it requires you to spend money first to buy it but if you are really going to use it this way – it is worth it. If it is not possible for you to switch for a bike, then try at first to switch to a public transport and you will also be surprised how much money you can save.
Pro tip: While being on a bus or tram you can do your side hustles: for example surveys.
21. TRACK YOUR SPENDING
A huge YES to track your spending. As I said before – if you want to be effective you need to be aware of where your money goes. And you won’t be fully aware if you won’t track your expenses.
Trust me on this. You may think you know this, but you will be surprised by some expenses you didn’t even remember or you will be shocked if you see how much money you spend on silly things like scented candles or coffee-to-go. It may be your awakening call to stop spending money on some of those things.
22. TRY NO SPEND CHALLENGES
Some people like to be challenged. I am such a person. I just love to compete and challenge myself. That is why doing money challenges works well for me. It can also be a fun activity to create your own money challenge chart. The most popular challenge I have seen on social media is „no spend day challenge”.
23. TRY TO EXERCISE AT HOME OR RUN OUTSIDE
Gym membership is another expense that can be cut off when needed. It should not mean that you resign from exercising or taking care of your health. That is absolutely not the point and remember that your health is a priority. But if you can exercise at home or go jogging outside instead of paying monthly for a gym membership then why not?
24. USE A DEBT PAYOFF TRACKER
Tracking is always a good idea if you want to stick to your plan. It can also give you motivation not to give up. There is this nice satisfaction when you mark another payment as „done” or you see how your debt is getting lower and lower. Sure, it takes time to prepare a chart for debt tracking but it is worth doing.
25. USE CASH ONLY
It is also recommended to use only cash when you have debts. The benefits of using cash instead of credit card or debit card are strictly psychological. When you pay with cash you feel so called „pay in paying”. It just hurts you to spend money so you think twice before doing it and therefore limit your expenses. It is also said that when you pay for something using cash you are more content with your purchase. The organisations that help people with debts are always recommending using only cash while paying off debts.
26. USE DISCOUNTS AND COUPONS
That is kind of obvious but still I feel like I should point it out. Use the discounts and coupons that shops are offering to lower your expenses, especially for food.
27. USE YOUR LOYALTY POINTS
Many shops are offering loyalty programs to make people buy only at their places. What the offer in exchange? A small % of discount when buying or point that you can then exchange for a gift card or something like that. Well once you have to shop anyway (groceries, etc) why not use the loyalty program? You can save more money thanks to that or sell the things that you received after reaching a certain level of points.
28. WAIT 12 OR 30 DAYS BEFORE BUYING ANYTHING
We often buy things because we are driven by our emotions. But luckily there are ways to handle it. When it comes to less expensive things like shoes or clothes – try 12h method. It means that if you feel like buying new thing you should wait 12 hours and make a purchase after that. In many cases you will see that after some time you don’t really feel like buying this thing. The same thing with more expensive purchases like a new phone or laptop. Try to wait 30 days before you make a decision so you can determine whether it is really your need or just a whim.
29. COOK YOUR MEALS
You would be surprised how much money is wasted on take aways or lunches. Preparing your own meals is much cheaper. First, as I said before, you need to do your groceries weekly, so you will always have some ingredients at home. Then try to create a plan for your meals and stick to it. Prepare a lunch box for your work and always take a snack with you (some nuts or fruits are always a good idea). Meal planning will also prevent you from using excuses for ordering takeaways (for example: let’s order sth because I have no idea what to cook today).
30. USE ONE OF THE PAYING DEBT METHOD
There are some methods that can help you to plan how to pay off your debts, especially if you have more than one. There is a snowball method (paying off the smallest debt first) and avalanche method (paying off the debt with the highest interest rate first).
I hope those tips will help you and motivate you to pay off your debt. Once you have done it, you can focus on saving money and investing it. You will be surprised how good it feels not to have any debts and be free.
Those tips will also help you to be more disciplined with your finances and can be used after you pay off your debt. Stick to them and achieve financial freedom.
