Four Ways to Save Money and Pay Off Debt

by Staff Writer

How to Save Money and Pay Off Debt

Frustrated by Your Burden of Debt?

If you are stuck in the quagmire of debt and find yourself constantly toiling to get out of the red it is quite understandable if you get frustrated.

Indeed, this is a very tough task for anyone and it is sometimes hard to see the light at the end of the tunnel – to get yourself out of this hole you will have to keep your eyes on the prize and save money every way you can.

Here are few things, such as replacing travel with conference calling, that can help you climb back into positive financial territory.

Avoid Dining Out

Dining out is one of the biggest expenses people have in their day to day lives – funnily, very few realise this and they continue to buy lunch and order take out for dinner. Heading to the supermarket for a big shop might seem expensive at first but you can take care of all your meals for weeks at a time – this will free up a huge chunk of change which can go straight to your repayments.

Cut Out Transport Costs with Telecommunication

Oil prices these days are very high – this has passed on structural costs to most parts of the economy, particularly transport. Many business people spend hundreds every month just getting to and from work and meetings.

At the same time, telecommunication advances now make it possible to have a meeting over the phone which is just as good as seeing each other face to face – by telecommuting you can cut out pretty much all your transport costs.

Consolidate Your Debts

If you have had a debt for a long period of time and still haven’t managed to pay it off yet, you should think of restructuring. This involves taking out a new loan to pay off past obligations – by doing this now you can take advantage of low interest rates and thus reduce your monthly repayments.

By shaving a few percentage points off what you normally pay you will be making a big differences to your finances and accumulating a little bit extra that can go straight back into your debt.

Hire an Accountant

Accountants might seem like solutions for only the rich and famous, yet they can play a role in anyone’s finances especially if you have some debt to pay off. So book an appointment to see how you can structure things so that they make sense from a tax standpoint – it might be the best fee you ever pay.

And of course, everything you save can go straight back to your repayments.

These methods can help you cut your monthly expenditure significantly and save a ton of money. Of course that won’t make a difference if you fritter this money away on other things. So everything you save needs to go straight to eliminating debt, otherwise you will end up stuck in debt for far too long.

Living in debt is no fun for anyone, so make sure you use these methods to get into positive territory so you can start your financial life anew.

Photo by Zach Klein

{ 3 comments }

InvestSmartGirl June 17, 2011 at

This is an excellent post. I love that you point out dining out at the top of the list. It’s amazing how much people will spend on dining out, and then gripe about how much money they don’t have. A $12 meal may not seem like much, but add in tax, tip, and transportation costs, and you’ve spent a pretty large chunk of change. Packing your own lunch is not only cheaper, but it’s also generally much healthier. Secondly, I agree that meeting with a professional is a wise choice. The fees charged by your average financial advisor are nothing when compared to the valuable advice you’ll receive, and the money you’ll save down the road by making smarter choices.

Mike Young June 17, 2011 at

Great tips. The only thing I would caution people against is consolidating debt and then thinking you “solved” your debt. Mathematically, you are 100% correct, it can make sense. But, unfortunately, many people consolidate and then rack up the debt again because they relax and think they did something. Plus, usually they consolidate as a home equity or 2nd mortgage, so they put up their most important asset (their house) as collateral. Again, I’m not saying cosolidating is wrong or inheritanly evil or anything, you just have to be very careful! Thanks for all you do!

Andrew Hallam June 19, 2011 at

You’ve made great points here. The one that sticks in my mind as the most powerful is to make sure that the money saved goes directly into paying off debt. No frittering away the extra cash on something else. If you’d ask the average person, I doubt they would even know where their money goes. It just goes! My wife and I have used a very effective strategy that helps us keep track of where the money goes. The results are astonishing. We keep track of EVERY penny we spend each day. At the end of the month we tally up categories: bills, groceries, eating out, traveling, pampering/entertainment. After a few months we can see where we spend more money than we need to and we can make the necessary adjustments. It’s a great strategy and is quite an eye opener.

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