Getting out of debt can seem like a daunting task, especially if you’ve been neglecting it for a while. There are many reasons why getting out of debt is important, but if you’re new to this, we’re here to help you navigate. Keep reading for a beginner’s guide for getting out of debt where we’ll share some of our favorite and simple tips with you.
Getting Out of Debt: Part 1
1. Check your credit
Knowing your credit score is an important step to getting out of debt. As you chip away at your debt, you’ll likely see some improvements with your credit score as well. Having a good starting point to base your progress off is a great way to motivate you and keep yourself on track. There are lots of different services that will provide your credit score and credit monitoring for free, but there are also paid options as well. However, if you’re looking to get out of debt, saving every penny counts. One of the more popular free options is Credit Karma. There is also an app for it and your score is updated weekly.
2. Cut the cords
Cable really isn’t necessary these days with streaming services like Netflix, Hulu, and Amazon Prime – check out these 5+ ways to stream TV for a fraction of the cost of cable. If you’re paying a costly cable bill but want to make getting out of debt a priority, now is a great time to cut ties with your cable company and save the money. You can easily pay for Netflix AND Hulu at a fraction of the cost and get almost the same content. In the same token, if you have a home phone AND a cell phone, consider dropping the home phone if it’s not 100% necessary. We cut the phone cord almost five years and the only thing we miss is telemarketer calls.
3. Start a savings account
Even if you aren’t contributing a ton of money to your savings account initially, having one set up will prevent those emergency bank drains. It’s better to have some set aside in case of emergency that way you won’t have to resort to using credit or causing yourself to go further in debt. Additionally, seeing your savings account grow is a great motivator to keep spending wisely!
4. Know your spending habits
Do you really know where all your money goes each month? Take the time to analyze your spending habits and find expenditures you can cut or reduce. Most people find this process eye-opening. Take the time to write down your expenses and track your spending. If your spending is out of control and debt has racked up, this is an important step to getting back on track and learning to spend your hard earned money with intention.
5. Limit dining out
Dining out can be a huge expensive, especially if you’re doing it often. This isn’t to say that you have to stop completely, after all, one of the biggest reasons for getting out of debt is so you can enjoy life more. Cutting it down to once a month or less is going to be a huge money saver, and when you’re saving all that money, you can direct it right towards paying down your debt. I’ve found a solid meal plan keeps our grocery budget manageable and our eating out to a minimum.
I hope these tips have helped you in the beginning of your journey for getting out of debt. Look out for part 2 soon with some more in depth details and tips on how to pay off that debt fast! Read part 2 now!