How To Save With Debt

When we're handling our finances, particularly when it comes to debt and savings, our focus tends to be on debt. Debt comes with interest, so it's always a good idea to prioritize it, but it doesn't mean that saving should be neglected. Saving money is just as crucial to achieving financial wellbeing as eliminating debt. That being said, we know it's difficult to make both saving and paying off debt a priority, especially if you're already living paycheck to paycheck. So, how do people do it? Luckily, we've compiled a list of tips and trick that will help you save with debt.

1. Make a budget:

- This is where the path towards financial well-being begins. You need to have an accurate understanding of the money coming and going out. The more thorough you are, the easier it will be for you to spot problem areas where you can cut back on your spending. The more money you can free up, the easier it will be to pay down your debts and build your savings.

2. Cut back on spending

- Using your budget, find the areas where you can but back on. It's never easy cutting back but just remember, no pain, no gain! You can always use the things you're cutting back on as a reward for sticking to your budget!

3. Calculate what you need to meet debt requirements

- Total everything up and use this as a non-negotiable as what you put towards your debts every month.

4. Decide what you want to save each month

- Based on the money you've freed up in your budget and the amount you owe on your debts monthly, decide how much you can manage to put away each month into savings.

5. Set up automatic transfers

- Depending on how much you plan to save each month, create automatic transfers from your chequing to your savings account. Do it on payday, so you don't see the money in the first place. Out of sight, out of mind.

6. Create a debt repayment strategy

- This can be anything from the snowball or avalanche method of repayment. You might be considering a consolidation loan or even a consumer proposal if your debt is that unmanageable. Outline your strategy. Set goals and a timeline. Write it all down so you can refer to it anytime you need to.

7. Set up automatic payments

- Setting up automatic payments towards your debt is a great way to ensure that you're not tempted to spend what you shouldn't. This strategy will help prevent late fees and negative items on your credit report.

8. Stop spending with credit

- If you want to see your debt shrink, credit is going to have to be off-limits until you get it under control.

We know that these eight steps are easier said than done, but you can do it! You have the ability to choose a promising financial future right now and commit to ending your financial woes. Taking these steps will get you there.

What other tips can you think of to help someone in debt save money? Let us know in the comments!