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Paycheck Chronicles

Military Saves: Pay Off High-Interest Debt

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
Obviously, you can find any number of ways to make money fast.  If you can't think of anything that would work for you, an internet search can jump start your brainstorming.

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.

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