Student loans. Car Payments. Rent. Credit cards.
The list of debt for Millennials can go on and on, but those four mentioned above are the biggest income drain of all. It may seem impossible to save while trying to pay off debt all while trying to have somewhat of a social life. But no matter how hard you try to avoid it, saving money is crucial.
Saving money is more than just creating a good habit that will serve you well – it’s tied to your emotional well-being and your financial future. If you are living paycheck to paycheck but still want to save money, here’s a roadmap to start you on your savings journey.
1. Cut Back on Going Out.
It’s okay to enjoy life. If your guilty habit involves happy hours after work, or dining out on the weekends, by all means—do it! But once per month, say “no” to drinks with the guys or that weekend shopping trip. Take the $40 and put it away! After a year, you’ve saved $480! Easy enough, right?
2. Don’t let your emotions guide your financial decisions.
This is extremely important. It’s so easy to feel overwhelmed paying your bills each month and seeing money go straight to your student loans, but you have to keep a level head to avoid making poor financial decisions. It’s not easy to save and pay off debt, but remember that you’re far from being the only one struggling and you can ask for advice any time.
3. Refinance your debt.
Stuck at a high interest rate? It’s time to refinance! Many credit unions even offer a cash incentive for members to refinance. From the cash bonus to lower interest rates, you could save over $100 per month just by moving your auto loan elsewhere.
4. Switch to a Credit Union
On the refinance note, save yourself on monthly fees as well. If you’re paying money just to have a basic checking account, it’s time to say goodbye. Find yourself a credit union and save the average $7 per month. That’s another $84 per year in savings!
5. Downgrade, if possible.
If refinancing your student loans or credit card debt won’t save you much money, it might be time to dig a little deeper. Look at your spending to see where you can cut back. Move into a cheaper apartment, get a roommate, get a cheaper car with better gas mileage. If you’re overspending, you simply need to cut back. If you’re not overspending, take time to find a side hustle or other means of increasing your cash flow to save and pay off debt at the same time.
Don’t stress over your finances. Do what you have to do until you can do what you want. It’s hard, but in the end, it will all be worth it!
Do you have any tips on saving money while paying off debt? Leave a comment below!
Until Next Time,