My biggest New Year’s Resolution for 2009 is one which we all can relate to: Getting out of Debt and saving money. This goal has become extremely critical in today’s economy. Everyone is trying to find a way to make ends meet but it seems that there is an endless supply of debt and not enough money to go around. The good news is that I know that getting out of debt and saving money can be done. The bad news is that it will take a complete lifestyle change on my part along with diligence and hard work but I know that the results will be well worth it if I can stick to the plan!
Ways to Get out of Debt/Save Money
I plan on getting out of debt and saving money by
Paying off small bills one at time: This is one I learned when I was moonlighting as a finance consultant in training at citicorp. Just think about it. If I have some extra money, instead of spreading it thin over a number of bills and perhaps only paying off interest in the mean time, I can place that lump sum on one bill and in less time than I know it I’ll have one less bill to pay. I’ll always pay the minimum due on my bills but any extra always goes to the smallest bill first. Once that bill is paid off I just add the money that I was spending to pay that extra bill to yet another bill and in less time than I know it I’ll be debt free.
Track spending and stop spending my extra money: A lot of finance gurus recommend that you buy one of those fancy computer software programs to track your spending and change your habits but this article is not about spending money, it’s about saving it. I recommend a good old pen and paper method but remember that this requires diligence. I’m already suspecting that I know what I’ve been spending my extra money on but seeing it on paper will drive it home. I recommend writing down every bill and purchase whether they be extraneous or not and looking over my list from there. Then I can start to whittle it down by relevance. Do I really need that brand new dress or that daily vending machine snack? What about going to the movies at 11$ a pop? Sure it’s just once a week but that adds up. 11$ a week times four weeks is 44$ buck a month. That’s 528$ a year! Just last week I went to the club with some of my friends. What did we do? Instead of waiting to get into the club and pay the cover charge, we got in for free. Sure we had to go a little earlier than usual but we each saved the ten bucks it would have taken for us to get in.
Find alternative sources of entertainment: The library always has free movies, many of them fairly new releases so I will be able to skip the movies or the video store altogether and pick out a free movie. I can also take a walk in the park,which would help me to become healthier (and it’s free), play a board game that’s been sitting in my closet for years, or simply enjoy the company of my friends at my own home.
Thrift shop: You can always find a cheaper item if you’re willing to take the time to look for it. Instead of spending 3$ for a tomato at the local supermarket, try your farmer’s market where you can buy quality vegetables at dirt cheap prices. Also I’ll buy bulk especially in frozen foods items that I can stash away in the freezer indefinitely! I can save a whole lot of money by doing this. Places like Sam’s Club and Costo can save you a fortune if you are sure that you will actually be using the items.
Automatic deduction of a specified amount to a savings account from your paycheck:
This one can hardly be stressed enough! If I allow 25$ to come out of my paycheck and I get 26 paychecks a year that adds up to 650$ a year! That’s a pretty good savings each year! Add this to all of the other things that I could do to save money and it might come out to 1000$ a year or more!