Let’s be real: Life can be a mess, but your wallet doesn’t have to be. Getting out of debt, or simply maintaining good financial health, is a long-term commitment. We spoke to three experts and compiled a list of their top 10 tips to help you save more, spend less and work your way out of the red.
Track where your money goes — that’s the first step to debt relief. Use a note- book, bullet journal or Excel sheet to log every purchase you make.
Budget, budget, budget. After figuring out where your money is going, plan out a weekly or monthly budget. Now stick to it. “Put a name to every dollar on its own, or it’s going to leave,” entrepreneur Tameeka Williams says. Separate your expenses into categories such as gas, bills, savings and entertainment, so you know how much you can spend on each.
Switch to cash and try the envelope system. After you create your budget, put the allocated amount of cash into separate envelopes for each group. The next time you go grocery shopping, if there’s no money left in the envelope, you won’t be tempted to buy those Oreos.
Ease into spending cuts by finally canceling that long-neglected gym membership or by ditching your daily Starbucks run. Then nix larger expenses such as cable, and get a streaming service in its place. Certified public accountant Polly Reynolds says dropping her landline and paying for Hulu instead of DirecTV saves her more than $100 per month.
Adopt the right mindset. Figure out what strategy works for you, and buckle down on your savings plan. Be reasonable with your expectations, otherwise you’re set- ting yourself up for failure, certified financial planner Rui Yao says.
Talk to your bank to find out if you can lower your credit card’s interest rates. Also, as long as your bank doesn’t charge you extra fees, you can consolidate your debt so you only have one payment each month instead of multiple. “If it has a cost, don’t do it,” Yao says.
Make it fun. Bullet journals and posters are great ways to track your debt and manage your money in a creative and colorful way. Williams says an aesthetic appeal can be beneficial because it helps keep the process satisfying and easy to stick with because it’s already set up for you.
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This is a part of how I track my finances in my bullet journal. In my opinion, having an overview about your financial situation is so important for your happiness and mental health! Do you track your finances? ~ So behalte ich meine Finanzen im Blick. Meiner Meinung nach ist es so wichtig, für das eigene Glück und auch die (mentale) Gesundheit, seine finanzielle Situation genau zu kennen! Notierst Du Deine Finanzen in Deinem Bullet Journal? #minimalistbujo
Police yourself. Let go of bad spending habits to ensure you don’t slip back into old patterns. The key is to balance being wise, enjoying life and staying within your means.
Try the snowballing method, which requires tackling your smallest debts first. Pay those off, and then work toward your bigger payments. Reducing the quantity makes the task of paying them off feel more manageable and helps build momentum. If the snowball method doesn’t work for you, try the high interest method instead, which focuses on paying off your debt with the highest interest rate first.
Admit that you might need more help, and seek out a financial counselor to hold you accountable. “There is no one-fits-all policy; it depends on what kind of person you are,” Yao says. Although, this can also be a Catch-22, according to Reynolds. Financial advice shouldn’t cost an exorbitant amount, so do your research to make sure you’re not being ripped off.