What are some steps to take in reducing your debt quickly?

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Answered by: Chelsea, An Expert in the Reducing Your Debt Category
Managing money is not always an easy task. After all, there are bills to be paid and household necessities to be purchased. But reducing your debt quickly, as well as forming a budget, is possible with a few simple steps.

Budget



Do you find yourself with only a few dollars in the bank right before your next payday, not knowing where your last check went? This is an issue with most people trying to manage their money. They want to save, but simply do not pay attention to where they spend it the most. Take your rent, car payment, and any monthly expenses into account, then break down the rest of your spending. This can help you pinpoint where you can cut costs and save yourself at least a few dollars each month.



Stop Frivolous Spending

While that cup of Starbucks every morning may seem like more of a necessity than a want, it can end up costing you around $30 a work week. That adds up to $120 a month, which can be put to better use paying a bill or invested into a savings account. The same goes for eating out often; more than once a week an really take a toll on your bank account. Skip the coffee shop, brew your own at home and pack a sensible salad for your lunch hour. Your wallet and waist will both thank you.

Put Any Extra Income Towards Debts and Savings

Perhaps it was a tax return or a birthday check from Grandma; whatever the case, put that extra cash towards bills first. Once you are free of debt, stash the rest into a savings account. Budgeting is so much easier once all of your debts are cleared, as you will not be paying interest, late fees, or any other unnecessary add-ons.

Do Not Touch Your Savings

Unless absolutely necessary, do not spend a single dime from your savings account. Use it instead as an emergency fund, only to be touched in an absolute crisis. This will ensure that it keeps growing and you are left with a nice chunk of change at the end of the year.

Make a List

Your grocery shopping routine will go much smoother if you make a list of everything you need. This will also keep you from impulse purchasing and spending more money than necessary. This goes for every aspect of your budget. If you know break what you earn monthly, as well as how much of that needs to go to bills, you have a far better chance of sticking to a written down plan of attack. Simply putting everything on a credit card and hoping for the best can get you into a lot of trouble, so create a plan to get yourself on track.

While reducing your debt quickly is not always fun, it can help prepare you for the future, keep your credit scores high, and best of all, reduce your stress! Budgeting is a great way to save for a rainy day, or simply keep your account balance above the red. Start enforcing these helpful tips today, and you will find yourself debt free in no time.

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