How to pay off debt
If you are able, living below your means to pay off debt is a great way to make sure you are financially secure for years to come. This is truly one of the easiest ways to maintain a healthy financial outlook. Learning to live below your means gives you the ability to focus on bettering your life, saving for the future and become satisfied with what you already have.
Don’t upgrade even if you can afford to in your budget.
This is truly the biggest part of living below your means. When you can afford an upgrade, it’s hard to resist doing it. The truth is, very few upgrades are needed. A larger home is almost always unnecessary. A new phone every time the latest version is released is rarely necessary. Even new shoes, pants or seasonal wardrobes aren’t really needed for most people every year. Stop competing with those around you. Truly focus on buying only what you need instead of what you want.
Upgrades to avoid when you’re paying off debt:
New vehicle when your existing one is sufficient and/or paid for and able to be repaired for less.
Upgrade to larger or nicer home or apartment when your current home is sufficient for your family size.
Upgrades to cellular phones, televisions, gaming systems and other electronics
Upgrades to adult wardrobes when clothing owned is in good condition and wearable. Kids grow fast and upgrades are expected. Most adults can wear the same items for much longer than children.
Never pay full price for anything.
I’m always trying to share the best deals with you and of course, trying to encourage coupon use. Before you buy anything, from groceries to new clothing or a car, check for sales, coupons, rebates and any promotional discount available.
When you pay off a debt, apply that payment toward other debt.
One way to continue living below your means is to put any “extra” money toward other debt or savings. When you pay off one debt, it may feel like you have extra money to spend. Instead of looking at that money as more you can spend, look at it as if it is more to save. You can apply that money toward other debts, or directly into your savings account if debt has been alleviated. You can then continue as you are in your monthly budget, effectively living below your means and saving more for future needs.
Have extra wages directly deposited into savings.
If you receive a raise, or have extra funds in your paycheck each pay period that don’t apply directly to budgetary needs, then ask your employer to direct deposit part of your paycheck right into your savings account. This way you can create a quality savings account to help pay off debt or to be there for an emergency fund in the future as needed.
You can easily begin living below your means to help pay off debt even if your budget is paycheck to paycheck. Focus on what you can save and put as much as possible toward your debt payments to create a better financial future for yourself.
I’d love to hear your tried and true ways that you have used to pay off debt. Let me know in the comments!