It might seem a little weird to be talking about paying off debt during a week that is all about savings, but stick with me for a minute. One of the obstacles to saving is not having enough money. Paying off high-interest debt can decrease your monthly expenses. Lower monthly expenses equals more money for savings.
Which is all great, except that sometimes paying off high-interest debt is hard. Whether it is a pesky $1,000 on a credit card, or that $40,000 car loan that you probably shouldn't have taken out, debt can be hard to shift. What I've found, though, is that most people can go extreme for a month or two and pay off, or at least make a significant dent in, their debt.
What would extreme look like? Everyone's situation is different, but here are some things to consider:
- no eating out for the month
- getting a part-time job for a couple of weeks or a couple of months
- eating down your pantry and freezer instead of buying groceries
- selling all the stuff in your house that you don't need or love
- babysit for neighbors
- pick up some mystery shopping
- give up something: shop-bought coffee, soda, cigarettes, beer
- eat vegetarian a couple of days a week
- collect aluminum cans, if they have any recycling value in your area
- cancel services you aren't using
- finding a car pool
- do online surveys
- rent out your house for a popular weekend in your area
Now, these things do take effort. One way to motivate yourself is to make a time limit or some parameters so it doesn't feel like too much. Maybe you'll eat vegetarian one day a week, or give up store-bought coffee for one month, or get a part-time job for three months. Knowing that there is an end to something hard can be the push you need to make it happen.
A little extra effort now, to pay off debt, will give yourself more money for all the future. That can help you build savings and can also provide a little extra disposable money in your month. It is definitely worth the effort.