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12 Smart Ways to Pay Down Your Debt in the New Year

Featured Image: @karen.lao
Article By: Liesl Hall

Is one of your New Year’s Resolutions to get out from under your crushing student debt? Let us help you with a plan of how you can make it happen. Here are 12 easy ways that you can pay down your debt, so you can write down your New Year’s Resolution with absolute confidence.

Find Out What You Owe

The first step in paying down your debt is finding out exactly how much you’re going to have to pay. There are tons of free credit score websites out there, including Credit Firm, but your bank should also be able to provide your credit score to you free of charge. Find out what your credit score is, see how much you owe and to whom, and you can take that first step into getting out of debt for the new year! Get a FREE repair consultation here to start improving your credit today and accomplishing your goals.

Prioritize Your Budget

To start saving so you can pay down your debt, you have to make some decisions about what’s important on your budget and what isn’t. Write down your typical expenses for the month, then decide what you can live without. When you get down to the basics, you become aware of what you need and what can wait. The Your Balanced Budget (Monthly Planner) is a great place to start when it comes to figuring out a budget that works for you.

Save Your Coupons

You know those annoying mailers that come from the grocery stores? Take a look at them before you toss them into the recycling bin because they might come in handy when you’re trying to save money! Couponing is a great way to save a little extra change on groceries, which will be better when you’re trying to pay off your debt in the long run.

Start Off Small

To start paying off your debt, start with the smaller payments first. Arrange your debt from smallest to largest. Make minimum payments on all accounts, and then use whatever is left over to completely pay off your smallest debt. The next month, do the same thing. This might take some time, but it feels great to finally be able to make those final payments.

Sell Your Extra Stuff

You already have extra, unwanted clutter in your house (because whatever we do, we just can’t seem to stay uncluttered!), so make that a positive thing! Go through and sell your unwanted junk. You can sell on platforms like eBay and Craigslist, and selling your extra clutter will help you make a little cash, pay down your debt, AND declutter your house at the same time!

Start a Side Hustle

If you’re stuck in a 9-5, consider starting up a side hustle to make a little extra money to pay down your debt. Do you love to paint? Sell your paintings. Do you enjoy making ceramics projects? Go to local flea markets and sell your mugs. Find buyers who love what you do and make a business out of it. It can be literally anything that people would be willing to pay for. Branch out and ask your friends and family if they would be willing to pay for your products or services, then decide if it would be a good side hustle idea and run with it! 

RELATED ARTICLE: 20 CREATIVE SIDE HUSTLES TO BOOST YOUR INCOME

Automate Your Savings

A great way to make sure that you are saving money each month is to automate your savings. Through your bank, set up a payment to go from your checking account to your saving account every month. You don’t even have to think about it after the initial set-up, which means – hooray! – you don’t forget to do it. The easiest way to save is to not think about it. Saving may seem hard at first, but with the right steps, you will be saving in no time.

Another easy way to automate your savings is to not get off track is to set them and forget them Digit. You’re probably wondering how that is possible? Hear me out. By using a saving app such as Digit you can set it and forget it. Digit is an app that helps you to save money without thinking about it. If you can not remember to save yourself, why not recruit an app to help you. Digit focuses on making financial health such as saving and paying down debt extremely easy

By saving a little bit every day, people that able to save themselves save, on average, $2,500 per year with Digit! This is one of the apps that helped me save for a down payment on my new home, I saved an EXTRA income of $1,000 a year. Click HERE to create an account and start effortlessly saving with Digit.

RELATED ARTICLE: 5 MONEY SAVING HACKS TO GET YOU OUT OF FINANCIAL TROUBLE

Set SMART Financial Goals

Your financial goals should be Specific, Measurable, Achievable, Results-focused, and Time-bound. Remember to set goals that will get you where you want to go, which in this case, is debt-free!

Keep a Budget Log

How are you going to keep track of how much you’re saving if you don’t write down how much you’re spending? Keeping a budget log is the best way to see exactly where your money is going so you can see how you can start saving to pay down your debt. There are lots of great, free budget resources online. Find one you like and write things down.

Reduce Entertainment Expenses

Let’s face it. Having a good time usually costs money. However, there are a bunch of activities that you can do that are free! You just need to use a little creativity and have a good time. Going to the park, having a stay-in movie night, exploring the town or city you live in… these are all fun activities and you don’t have to spend a cent. Be conscious of your entertainment expenses, and where you can, cut them!

RELATED ARTICLE: 7 UNNECESSARY SPENDING HABITS YOU NEED TO CUT

Use Holiday Bonuses Wisely

You got a holiday bonus… congratulations! BUT, instead of splurging on the next flight available to the Bahamas, consider saving your bonus instead of spending it right away. Every penny counts, and when you’re trying to pay off your debt, a little extra income can really help you stay on the right track and might even help you down your debt faster. We’re not saying you shouldn’t treat yourself occasionally, but maybe treat yourself and get a $40 manicure instead of spending your WHOLE bonus on a $400 staycation.

Use a Personal Loan to Consolidate Debt

An unsecured personal loan can move your debts into one account, making monthly payments easier to manage. This is great if you are intimidated by making tons of payments with tons of different interest rates. Consolidating your debt with a personal loan makes things so much easier and also saves you money in the long run.

How are you planning to pay down your debt in the New Year?

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10 Comments
  • Deborah Regen
    December 12, 2017

    This is a useful and practical post for many people. I feel one main reason that people do not create a budget or have a true idea of their income versus expenses and outstanding loans is fear. They are afraid they might get upset, feel overwhelmed, or don’t really know how to decrease their debts in a meaningful way.

  • Carly Sharples
    December 12, 2017

    Really good tips here and timely advice in the run up to Christmas when most budgets are already stretched and debt becomes something you will tackle ‘later on’.

  • Erin
    December 13, 2017

    Really great advise!!! Good post to help out around Christmas with so many expenses and good to keep a budget and not get all crazy with presents and extras.

  • Lydia Samson
    December 13, 2017

    I love this, very practical and easy to do steps! Great Post!

  • Casey
    December 13, 2017

    Great tips, especially for grad students and college students like me!

  • Sylvia
    December 13, 2017

    I agree with your tips! It has worked for me and it feels so good to pay debts that you don’t really look at money the same way afterwards! Life is easier without debt though i feel society tries its best to make you have a lot of it!

  • Mandee Rohn
    December 13, 2017

    Thanks for sharing this very helpful and informative post!! I’m really trying to “work my side hustle (etsy store) to pay down my debt! Best wishes to everyone!

  • Jessica
    December 14, 2017

    This is really good advice, also loving your pictures!

  • Bacheca BBincontri Milano
    December 14, 2017

    Great ideas to save money. Thanks for sharing

  • Diana
    December 16, 2017

    Thanks for sharing this very helpful and informative post!!This is really good advice, also loving your pictures!

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