How to Get out of Debt and Start Saving
It seems easy and stress free to swipe the new credit card, or try to get approved for a loan to cover the big expenses. However, as easy as it seems, it’s more stressful! Racking up debt results in heftier monthly payments, and from personal experience I know that these can creep up faster than expected, sometimes leaving you with the occasional… “Where did all my money go?”
Set Your Budget
Whether you do it per month, per paycheck, or per week, budgeting will make a huge impact in your spending habits. You might think it looks a lot better not to include those small daily and weekly expenses in your budget and just plan to put them on your credit card (which you then have to pay off), but by including expenses such as coffee or the occasional lunch out, you are able to ensure that you have enough to cover everything during the week. Also, budgeting provides you with an overview of everything, so you can see where you could possibly stop spending.
Note: Don’t forget to add savings to your budget. I have always been told to think of my savings account as one of my bills when budgeting. This is because when you think of your savings as a bill, rather than an option, you are more likely to place funds aside for it. Whether its $50 or $5 placed in your savings when budgeting, it will make a difference.
Do you need help building your credit score? Our eBook: 6 Tips for Improving Your Credit Score can help.
Question before You Buy
No matter how well you budget, it is completely up to you and only you to follow that budget. This means that no one is there to make sure you stay on track besides yourself. Getting a good start on budgeting and saving starts with the mindset that if it isn’t in your budget, then you don’t need it! Sometimes this can be the most challenging part. If this is the case for you, then do what my coworker always makes me do—give yourself five good reasons. Are the reasons practical? Then buy it! If they seem far stretched—wait. Having a good mindset is a great way to follow your budget, however you may want some resources in order to get started on the path of saving!
Use Your Local Resources
There are plenty of resources available to help you get on the path of saving. One good resource is your financial institution’s website, and even their employees! Many financial institutions have tools and resources on their websites such as blogs, links, and calculators to help learn how to get out of debt, begin saving, and plan your expenses. Also, your peers, coworkers, friends, and family are great resources! What have they used to help them get on track and stay there? How did they save ahead of time, and what resources did they use? This is a conversation you can have with anyone you are comfortable with, and you can use the tricks and tips they provide you!
So what’s the Big Deal?
Saving ahead of time will provide you with both comfort and stability, and won’t leave you guessing how to spend your money. Use your budget wisely, being sure to stay on track. Big expenses will come up, so plan ahead of time!
Reducing debt and saving are two ways to improve your credit score. Learn others.
About Sophronia (Sophie) Goodrich
Sophronia (Sophie) Goodrich is a Senior Consumer Loan Advisor in VSECU’s Sales and eCommerce Center. She spends her days helping members make wise financing decisions. A born problem-solver, Sophie’s favorite part of being a loan advisor is finding an affordable solution to tough financial challenges. She loves connecting with members all over Vermont and enjoys being part of the excitement they feel as they achieve their goals.