5 Ways to Cut Debt and Increase Savings
Debt can be a downward spiral that can be so intimidating many people choose to ignore it instead of trying to resolve it. Unfortunately, the longer you push debt off to the side, the worse it becomes. The stress of debt can be extremely overwhelming, especially when you have a mortgage to pay and a family to care for. However, once you make the decision to tackle your debts head on, it is one of the most rewarding and even empowering feelings. Little by little you will regain financial freedom and security so that eventually you can spend money on the things that are most important to you.
Debt solutions and strategies can vary for everyone, but generally there are more options available earlier on. Getting out of debt is about learning new spending and saving habits so that you can ultimately stay out of debt in the future.
Here are 5 ways to cut debt and increase savings:
- Replace bad spending habits with good ones. This includes wasteful spending on things such as buying your coffee every day. It may not seem like a lot, but over the course of a year that $500 could be used to pay down debts or be put into a savings account.
- Are there any ways for you to increase your income? This does not necessarily mean you have to get a second job, but are there opportunities to increase your hours or work overtime?
- Determine which of your expenses could be decreased. This may mean sacrificing entertainment, not eating out for a period of time, or learning how to stretch your dollar at the grocery store. In addition, there are many government assistant funds that you may not even know about, such as the child tax benefit or the GST/HST rebate that. You definitely don’t want to miss out on these!
- Having a budget with all your expenses like food, transportation and entertainment can help to keep track of money going in and out. Keeping a journal and logging your purchases every day can reveal your spending habits. This will help you to make changes and avoid buying things you don’t need.
- Refinancing your mortgage and debt consolidation are other options to consider. Consolidating your debts into one will help to lower your monthly mortgage payments and make your debt more manageable.
In need of assistance? Contact Manny Johar of Expert Mortgage and he can provide you with a low interest home equity loan so you can pay off your debt even faster!