How to Save Money and Reduce Debt

sgilbertvic

New member
Does the topic of saving money make you feel a little guilty? You have good intentions when it comes to saving money, but something always comes up. The car needs new tires, the teenager needs braces, the house needs a new roof—and just like that, saving money takes a back seat to life stuff. So you put it off. You tell yourself you’ll find ways to save money once you reach a certain milestone, like when you hit a specific age or get that raise you’re after.

But in reality, you’ll only start saving money when you learn healthy money habits and let your future needs be more important than your current wants—aka when you make saving money a priority. And you don’t need everything to magically line up perfectly before you start saving. There are plenty (and we do mean plenty) of practical ways to save money and breathe some fresh air into your budget.

With a few tweaks to your spending, you’ll be on the fast track to saving money in no time. It’s not rocket science, though. Here is a money-saving tip (that actually makes sense).

1. Say goodbye to debt.​

Monthly debt payments are the biggest money suck when it comes to saving. Debt robs you of your income! So, it’s about time you get rid of that debt. The fastest way to pay off debt is with the snowball method. This is where you pay off your debts in order from smallest to largest. Sounds kind of intense, right? Don’t worry, it’s more about behavior change than numbers. Once your income is freed up, you can finally use it to make progress toward your savings goals.

Snowball Method :
Do you remember building snowballs in the backyard as a kid?

You probably learned that the fastest way to get traction was to pack some snow into a tight ball and start rolling it through the yard. As it gained momentum and speed, the snowball grew into something more like a snow boulder.

It’s a good technique for building snowballs, and it’s an even better method for paying off your non-mortgage debt.

How Does the Debt Snowball Method Work?​

The debt snowball method is a debt reduction strategy where you pay off the debt in order of smallest to largest, gaining momentum as you knock out each balance. When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance.
It looks something like this:

Step 1: List your debts from smallest to largest regardless of the interest rate.
Step 2: Make minimum payments on all your debts except the smallest.
Step 3: Pay as much as possible on your smallest debt.
Step 4: Repeat until each debt is paid in full.

An Example of the Debt Snowball​

Say you have four debts:

$550 medical bill—$50 payment
$3,500 credit card debt—$63 payment
$7,250 car loan—$135 payment
$10,500 student loan—$96 payment

Using the debt snowball method, you would make minimum payments on everything except the medical bill. But let’s say you have an extra $500 each month because you took a side job and cut your expenses down to the bare minimum.

Since you’re paying $550 a month on the medical bill (the $50 payment plus the extra $500), that debt will be gone in one month. Then, you can take the freed-up $550 and attack the credit card debt, paying a total of $613 ($550 plus the $63 minimum payment). In about four months, you’ll wave goodbye to that credit card. You’ve paid it off!

Now, punch that car loan in the face to the tune of $748 a month. In 10 months, it’ll drive off into the sunset. Now you’re on fire!

By the time you reach the student loan—which is your biggest debt—you can put $844 a month toward it. That means it will only last about 12 months. After that, Sallie Mae better get used to living somewhere else, because you’ve kicked her out!

Thanks to your hard work and sacrifice, you have paid off $20,000 of debt in only 27 months using the debt snowball method!
 

Dartho

Member
Thanks for this information, debt is one issue i don't which to have. It could make one panic if not handled properly. Saving or investing money is the best way o run away from debt.
 

Maks25

Well-known member
If there's any discipline we must instill in ourselves as a people of this country, it is the discipline of reducing our expenditure and increasing savings and investments.
The average Nigerian is always indebted! I think we need more of money management training.
 

Augusta

Valued Contributor
I'm always grateful that I don't have to worry about debt , because I was tutored right from my young days that it is good to always have a residue of money which is always from savings when your snowball method is a good one which I hope we work for those that really it to save money in an easier way and save money. Yeah if one has got diverse bills to pay it will be great to spread ones income across the bills then sort them out In small percentage which wouldn't be a bad idea
 

Afrinish

New member
It’s easy to get into debt, but it can be painfully difficult to get back out. It can take just a few months to create tens of thousands of dollars in debt, but it may take decades to pay off that debt.
Everyone who pays off their debt does it a different way. They often combine strategies to chip away at their debt, and they stick with those strategies until the debt is gone. If you're struggling and need a starting point for your debt-reduction strategy, here are some ways to get out of debt.
 

BabsTee

New member
Does the topic of saving money make you feel a little guilty? You have good intentions when it comes to saving money, but something always comes up. The car needs new tires, the teenager needs braces, the house needs a new roof—and just like that, saving money takes a back seat to life stuff. So you put it off. You tell yourself you’ll find ways to save money once you reach a certain milestone, like when you hit a specific age or get that raise you’re after.

But in reality, you’ll only start saving money when you learn healthy money habits and let your future needs be more important than your current wants—aka when you make saving money a priority. And you don’t need everything to magically line up perfectly before you start saving. There are plenty (and we do mean plenty) of practical ways to save money and breathe some fresh air into your budget.

With a few tweaks to your spending, you’ll be on the fast track to saving money in no time. It’s not rocket science, though. Here is a money-saving tip (that actually makes sense).

1. Say goodbye to debt.​

Monthly debt payments are the biggest money suck when it comes to saving. Debt robs you of your income! So, it’s about time you get rid of that debt. The fastest way to pay off debt is with the snowball method. This is where you pay off your debts in order from smallest to largest. Sounds kind of intense, right? Don’t worry, it’s more about behavior change than numbers. Once your income is freed up, you can finally use it to make progress toward your savings goals.

Snowball Method :
Do you remember building snowballs in the backyard as a kid?

You probably learned that the fastest way to get traction was to pack some snow into a tight ball and start rolling it through the yard. As it gained momentum and speed, the snowball grew into something more like a snow boulder.

It’s a good technique for building snowballs, and it’s an even better method for paying off your non-mortgage debt.

How Does the Debt Snowball Method Work?​

The debt snowball method is a debt reduction strategy where you pay off the debt in order of smallest to largest, gaining momentum as you knock out each balance. When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance.
It looks something like this:

Step 1: List your debts from smallest to largest regardless of the interest rate.
Step 2: Make minimum payments on all your debts except the smallest.
Step 3: Pay as much as possible on your smallest debt.
Step 4: Repeat until each debt is paid in full.

An Example of the Debt Snowball​

Say you have four debts:

$550 medical bill—$50 payment
$3,500 credit card debt—$63 payment
$7,250 car loan—$135 payment
$10,500 student loan—$96 payment

Using the debt snowball method, you would make minimum payments on everything except the medical bill. But let’s say you have an extra $500 each month because you took a side job and cut your expenses down to the bare minimum.

Since you’re paying $550 a month on the medical bill (the $50 payment plus the extra $500), that debt will be gone in one month. Then, you can take the freed-up $550 and attack the credit card debt, paying a total of $613 ($550 plus the $63 minimum payment). In about four months, you’ll wave goodbye to that credit card. You’ve paid it off!

Now, punch that car loan in the face to the tune of $748 a month. In 10 months, it’ll drive off into the sunset. Now you’re on fire!

By the time you reach the student loan—which is your biggest debt—you can put $844 a month toward it. That means it will only last about 12 months. After that, Sallie Mae better get used to living somewhere else, because you’ve kicked her out!

Thanks to your hard work and sacrifice, you have paid off $20,000 of debt in only 27 months using the debt snowball method!
Thanks for sharing, full of information
 
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