In order to do what you love, where you want to live, you need to get out of debt.ย Debt keeps you in bondage to a pay cheque.ย Debt keeps you in the city, building someone else’s dream.ย Debt keeps you living in emotional turmoil and bondage.ย But not everyone knows how to get out of debt.
To get out of debt takes a commitment to a few basic principles:
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ย How to get out of debt
1.ย Stop spending money you don’t have.
2.ย Pay off the highest interest loan first.
3.ย Use the money saved by paying off the highest interest loan, to start paying off the next loan.
4.ย Live frugally so that debt doesn’t build.ย Make a commitment with your spouse to work together to live frugally.
5.ย If your mortgage debt is overwhelming your budget, sell out and invest in land and build a smaller house mortgage-free.
If this is overwhelming to you, sit down with a trusted counsellor and make a plan to get out of debt.ย A family friend, an accountant, a pastor or rabbi can give you an objective perspective and accountability to help you reach your goals.ย Pick someone whose already living debt-free that has practical experience and can advise you in a positive way.
But each of these get-out-of-debt-steps requires a fistful of money to achieve.ย Where is that fistful going to come from?ย Baby steps in frugal living can help you achieve your goals.
Start taking some baby steps to get out of debt today.
Here’s 50 strategies to save $2 or more this month.ย Add a few of them together and you will have more than $100 to take to the bank at the end of the month.ย In a year that will be $1200 or more to help you get out of debt or save for a rainy day.
1.ย Pay off your debt before making Retirement savings payments.ย Are you making regular Retirement saving contributions to mutual funds, by getting a loan at tax time?ย If you have credit card debt, take that retirement savings money and put it toward your credit card debt first. Skip the RSP/401 contributions until your consumer debt is paid off.
2.ย Pay your bills on time.ย Every time you pay a bill past the due date you are charged a penalty of $2 to $10.ย Make that payment when it comes in the mail and you won’t fall behind.ย Some online banking services allow you to schedule payments from your account.ย When you schedule the payments ahead of time you don’t have to stress about forgetting to pay the bills ontime.
3.ย Stop buying packaged foods and cook your food from scratch. Packaged pasta mixes with sauce are $5 or more.ย By using pasta, potatoes or rice and adding a white sauce or marinara sauce you control the ingredients, and you save half.ย $2 to $3 savings per meal.
4. Bake your own bread.ย Baking one loaf of bread instead of buying it will save you $3 to $4.ย If you use 2 loaves a week, you’ll save $25 a month.
5. Get a water filter system for your house and take your water from home in a stainless steel or glass bottle or canning jar, rather than buying plastic bottles of water during your day.ย Savings is $1 to $2 per time.
6. Recycle your drink containers.ย Take your empty pop, water, juice and alcohol containers to the recycle depot and get the deposit back.ย $1 per 20 containers.
7.ย Make your own pop and soft drinks, and limit pop consumption to special occasions.ย You’ll reduce your consumption of high fructose corn syrup, a known carcinogen, and save $1 per glass.ย If your family goes through a 24 pack of pop every month, you’ll save almost $25 per month by making your own.
8.ย If you drink alcohol, make your own beer and wine.ย When you make your own fruit wines using home sourced ingredients your cost is minimal.ย Beer and grape wines use stock concentrate and are cheaper than buying bottles of wine or beer at the liquor store.ย There’s no liquor tax on homemade wine and beer.ย Savings is about $5 to $10 per bottle for wine.
9.ย Make your Christmas gifts rather than buying gift cards.ย Food gifts are appreciated by almost everyone.ย Gifts made from recycled materials are inexpensive and reflect your values of earth-friendly living.ย Not all handmade gifts will save you money over buying gift cards — so balance the choice of gift with the need that the gift meets.ย Gift cards are $25 to $50.ย Savings will vary.
10.ย Give the gift of time.ย Many people on your gift list would rather spend time with you than receive another thing that they have to store.ย For family that you don’t see often, consider giving the gift of time.ย You could prepare a meal and take it to them, complete with a table cloth and candles and spend an evening or day serving them and visiting.ย Savings will vary.
11.ย Turn off your electric clothes dryer and hang your clothes indoors on a rack, a Strata Heavy Duty Clothesline Kit,ย or outdoors on the line, to dry.ย Savings of $2 to $5 per load.ย Ifย you do 5 loads of laundry a week – $10 to $25 per week.ย If you must use an electric dryer, due to lack of space, use wool dryer balls to reduce your drying time by up to 40% — $5 to $12 per week.
12.ย Put plastic on the outside of your windows in winter.ย Even if you have double or triple paned windows, putting up plastic can insulate your home and decrease your heating costs.ย Savings up to $25 per month in reduced heating bills, in winter.
13.ย Unplug computers, stereos and televisions when not in use.ย These appliances continue to draw electricity even when they are turned off, so by unplugging them you will reduce your energy costs. (up to $10 per month).
14.ย Take your own grocery bags to stores that charge you for your bags — $.05 per bag or up to $.50 per grocery trip.
15.ย Plan a leftover lunch once or twice a week to turn leftover vegetables, meat and grains into a nutritious soup or salad.ย Savings of $2 to $10 per meal.
16.ย Make your lattes, machiatos andย mochas at home in your mocha pot, and take them with you.ย Savings of $5 per serving.ย If you have a latte a day habit that’s $25 per week, $100 per month, or $1200 per year.
17.ย Pay your credit card off completely before the due date and you’ll save on interest charges.ย Credit cards are interest free if you pay them off completely by the due date each month.ย If you miss the due date, you’ll be paying interest from the date of the transaction at an interest rate of 18% or more.ย If you are overwhelmed by credit card debt today — Put your credit card in the freezer and stop using it now.
18.ย Rent movies instead of going to the theatre or borrow movies from your public library.ย Save $20 to $40 for a movie night with popcorn and drinks.
19.ย Make soups from scratch rather than buying canned soups.ย You control the ingredients, reduce salt, sugar and msg, reduce GMO ingredients and save $1 or more per serving.
20.ย Learn to make a basic white sauce (butter, flour or tapioca starch, milk or water) to use as a base for gravies, soups, and sauces. You’ll save $2 to $5 over packaged mixes.
21.ย Reduce your trips in the car by combining errands, post office pick ups, and work or church into one or two trips each week.ย For us each trip to town is $7 in gas.ย Even though we work from home, we can find reasons to go into town almost every day.ย By combining errands — talking to each other before we jump in the car — we can save time and money.ย Savings of $7 per trip.ย Save one trip a week and its over $25 per month.
22.ย Reduce your freezer usage by canning or dehydrating your fruits and vegetables during the growing season.ย We raise our own lamb and goat meat, as well as preserving most of our own fruits and vegetables, which significantly reduces our food expenses during the year.ย However, we had 4 freezers plugged-in to store the bounty and feed us for the year.ย By unplugging just one of the freezers our electrical bill dropped by $25 per month.ย I’m working on turning many of the frozen fruit in another freezer into jams that can be stored without refrigeration.ย We’ll be able to unplug another freezer then.
23.ย Reduce your income.ย Sometimes getting out of debt isn’t about making more money.ย Do you have 2 incomes in your household?ย Do the math.ย We found that adding up the cost of earning the second income — increased taxes, clothing and vehicle expenses and increased eating of expensive packaged food — meant that the second income was going to support the second income.ย By staying home and using my time to save our household money, we increased our standard of living and were able to live debt-free.ย Would you save money by reducing your income?
24.ย Have pizza night at home.ย Make a bread dough crust, top with tomatoes, peppers, mushrooms and cheese and you have a large pizza for a few dollars rather than $15 or $20.ย Add a salad and you have a higher nutritional meal, fewer calories and more enjoyment.ย Savings of $10 to $15 depending on choice of toppings.
25.ย Celebrate a sabbath day once a week.ย Make a special meal, set your table with a table cloth, candles and your best dishes.ย Meet together as a family and enjoy each other’s company and stay home.ย You will meet the need of connection and rest, without going out to a restaurant.ย Savings of $30 to $60 per week over a restaurant meal, plus the gas savings.
26.ย Do your own housework, rather than having a maid or housekeeper.ย Sometimes the clutter and dirt can get overwhelming in a busy life.ย There is the temptation to throw money at the problem by hiring a maid service to keep the house clean.ย But by doing your own housework, you actually see where you have organization problems and can begin to find creative solutions to the clutter or disorganization in your home.ย Savings of $15 to $30 per hour of cleaning.
27.ย Wear used clothes — everyone does.ย Do your clothes shopping at Value Village, a charity thrift store or a local free store.ย You will find unique clothing for your nonconformist image, and save money.ย Savings of up to $100 (or more) per outfit.ย Don’t forget to accessorize. You can look beautiful on a budget.
28.ย Trade child care with a friend.ย Savings of $5 to $10 per hour in babysitting expenses.ย This works best if your children are the same age, or if you can offer a valuable service that your friend needs — trading child care for homemade bread, or hair styling, for instance.
29.ย Insure your second vehicle only when you really need it.ย Does your household run with two vehicles.ย Consider insuring the second vehicle only for the season that its needed.ย You’ll save half the cost of insurance — usually $200 to $500 per year or $25 to $50 per month.
30.ย Make draft stoppers for your home and use them to reduce heating costs in the winter.ย Draft stoppers can be as simple as a rolled up towel across the bottom of a door or as elaborate as a stuffed snake or a stuffed cat with a long tail.ย Even if you heat with wood, by reducing drafts you can reduce the temperature that your stove has to burn at, saving on wood use.ย A cord of wood is over $200 this season, while gas and electricity are climbing.
31.ย Go for a walk, jog, ride a bike, or snow shoe instead of paying for the gym or pool membership.ย Go with a friend or family member and enrich your relationship while exercising.ย Memberships run $30 to $50 per month.
32.ย Cancel your cable TV.ย Cable or satellite TV costs $20 to $80 per month depending on your package.ย Do you really need a hundred channels?ย Do you really need to watch the news?ย Are there other ways that the need for current news, sports and entertainment can be met?ย Internet?ย Magazines?ย By cancelling your cable you will realize a significant savings.
33.ย Buy books online rather than at a bookstore.ย Shopping through Amazon.com or another online store can save money over the costs of both new and used books, over in-person shopping.ย In many cases you can flip through the online book to get an idea if its what you were looking for, before you buy.ย Savings is often 30% to 50% over in-person shopping.
34.ย Get a Kindle or other ebook reader and take advantage of the thousands of free e-books available in your areas of interest.ย My homeschool students were delighted reading historical fiction by G. A. Henty.ย Several times I looked into purchasing a complete set of G. A. Henty reprints, but was discouraged by the hefty price tag — over $500 for 100 books.ย The Kindle edition is less than $5 for a digital file with the series, often free.
Many other classic books are available for free or for only a couple of bucks.ย If you are a reader or you are homeschooling consider getting a Kindle of your own.ย There’s a free Kindle app for your PC so you can see if you like it.
35.ย Date night for free.ย Spend time with your spouse doing things that you both enjoy.ย Be creative and find things to do that are free or cheap — a picnic at the lake, a hike or a walk, do a puzzle, play a board game, watch a movie and discuss it.ย Savings of $40 to $60.
36.ย Declutter your home.ย By decluttering and organizing your household, you will reduce the need to go out and buy again, the things that you own that you can’t find.ย Hammers, pruning shears, scissors, tape, can all get lost in the clutter.ย But since you need these tools regularly, if you can’t find them, you will need to replace them.ย Savings for staying organized:ย $5 to $25 per month.
37.ย Family Night for free.ย Your kids and grandkids want your time and attention.ย Don’t substitute money for your personal time and attention.ย It is no substitute.ย Take the time to play with your kids.ย Spend time with them.ย Go fishing.ย Make a pizza together.ย Bake cookies.ย Make pulling taffy.ย Get to know them.ย It will pay dividends later.ย And save you money today.
38.ย Close off unused rooms in the winter.ย By keeping the door to bedrooms closed, you save on heating costs.
39.ย Switch to full spectrum LED lights in rooms that you frequent.ย By using full spectrum lighting you reduce the need for special SADD lighting, and improve your mood and energy levels.ย Compact florescent lights save energy costs, but have mercury vapour that can escape the light bulbs even when turned off. LED light bulbs are brighter than CF bulbs and use even less energy.ย Plus LED lights don’t have the environmental costs that CF light bulbs have.ย Yes, they are initially more expensive but the prices are already coming down.
40.ย Switch to wood heat.ย We purchased a wood heating stove in our first home to replace an oil burning furnace.ย We were paying $250 per month in home heating costs in 1983 — its twice that now.ย The wood stove paid for itself in the first year of use.ย Although wood is $200 per cord today, the cost of electricity and natural gas is keeping pace, so wood is still a savings.
41.ย Turn down your hot water heater.ย We have our hot water set at 130F in order to wash wool.ย In the winter, when our hot water is supplemented with water from the wood cook stove reservoir we reduce the temperature on the electric hot water tank to 120F.ย We realize a savings of $20 per month in our electrical bill.
42.ย Save up for big purchases rather than putting them on credit.ย By paying cash, you can often get a reduced price on a big purchase, like a car.ย At the very least you will reduce your credit card debt by paying cash.ย And it will feel so good to be driving around without thinking of the car payment that is due next month.
43.ย Don’t sign up for magazines and buying clubs where you will be encouraged to spend money that you don’t have on things you don’t need.ย My friend is hooked on Groupon.ย She can’t say, “No” to a ‘good’ buy.ย Ifย you are like my friend, take your name off the list now.ย Cancel your memberships.ย Don’t renew your subscriptions.ย Spending money can be a substitute for facing your pain.ย But it creates more pain when your debt rises.ย Stop spending money and seek counselling, talk to a friend, rabbi or pastor,ย to help you cope with the pain in a healthier way.
44.ย Get your magazines at the public library.ย If your public library doesn’t carry the magazine that you want to read, request that they do.ย Many public libraries are looking for recommendations from their members for items to purchase with their grants.ย Savings of $15 to $50 per year.
45.ย Buy used rather than new.ย Are there purchases that you’d like to make — tools that you need to live your dream, equipment to make your life easier.ย See if you can find them used, before you buy new.ย For instance, a new floor loom will set you back $3,000 but you can find them today at a tenth of that price.ย Everyone drives a used car, but a new car loses a significant value when it drives off the lot.ย Look for used first.
46.ย Barter for what you need.ย Many communities have a barter club, where members exchange services and products for a fee, being able to take the same value from other members.ย Or set up a more informal exchange one on one.ย When someone gives you something that you need, please give something of yourself back to them — don’t just be a taker, be a giver, too.
47.ย Bust your stash.ย Most of us have a stash of stuff that feeds our hobbies.ย Sometimes this stash gets out of hand, requiring more and more boxes and space to store it.ย Stop adding to your stash and begin to plan projects that use it up.ย Your stash is a great place to find the ingredients for your gift giving.ย How much will you save if you put a moratorium on stash building for the next 3 months?
48.ย Buy used books instead of new.ย Many books currently being sold online as new, are available in used editions from abebooks or amazon.com.ย Before you buy new, check out the used options.ย Even text books can be found used in good condition.ย Or even better, rent your text books, if you can.
49.ย Put on a sweater and wool socks before you turn up the thermostat.ย You will be cold if your feet and neck are cold.ย By wearing socks and a sweater you will tolerate lower house temperatures and save on heating costs.
50.ย Put wool blankets on your bed.ย Wool is insulating and will keep you warm in winter and cool in summer.ย Get used wool blankets at the thrift store and wash them on delicate in your machine.ย Hang to dry.ย Wool is naturally soil resistant, antibacterial, flame resistant, and mite proof.ย You will save money, get a better night’s sleep under a wool blanket.
This list is just scratching the surface of small steps you can take to save money, and get out of debt.ย These ideas won’t apply to every one, but take the one or two that will work for you and apply them to save some money and get out of debt.ย Once you get out of debt you’ll be able to use these same strategies to move forward on your plans for the self-sufficient life that you want.
Your turn:
What would you do with an extra $100 this month?ย Could you find it by applying some of these strategies?ย Are you on your way to being debt-free? Leave a comment.
One part of consumerism is FEAR. Insurance is one of these are fear causes you to insure, perhaps MORE than you ever would otherwise. I am healthy. My family is fairly healthy. When I worked for a building supply and home center chain they offered a group insurance policy. There were still co-pays to pay if you needed some things. MANY things were not covered. At the time I paid the equivalent of a week’s pay each month. Her is how it might break down. At $350/month in one year you have paid $4,200. This is the amount whether you use it or not. If you don’t use it, you get nothing for the fearful payments you have made. Of course over 10 years this is $42,000 ! During the 6 years I worked for this company, I estimate I spent MAYBE 42,000 /year on headache pills, pain pills, shampoo, soaps, bandaids, ANYTHING you can find at a pharmacy. Group health insurance doesn’t cover most of these items we buy al the time. When the insurance DOES cover something, it is 80%, perhaps, and you STILL pay above that. $4,200 – $2,000 = a difference of $1,200. If I put this money each month into my own account from which I pay all health related things I get full use of the money and also have whatever remains. Let’s say you get gall bladder troubles and have to have surgery. This may cost $10,000 or more. IN this case, pay as much as you have in your account to reduce the amount owing. Let’s say you have $4,000 from having done this for 4 years. You then owe $6,000. I don’t know any individual owed money who wouldn’t be happy to get a payment of $350 per month until this was paid. At this rate in one year you would owe just $1,800 on your surgery. In 5 more months it would be paid completely. That is good news. If you did not have to do such a thing your money continues to grow. If you continue to build this account and spend $2,000 of it each year on all your things from the pharmacy, at the end of 10 years you will have a surplus of $12,000 TAX FREE DOLLARS. Imagine sending it maybe on a 10 week holiday for two touring Europe and Scandinavia ! Consider devising and running your OWN health Savings Account. If you are earning well and healthy from doing it, it will work for you.
Good advice. The issue is whether individuals have the self discipline necessary to create an emergency fund. One must make it a priority or your budget stretches to fill the income.
When I had my son and started staying home I did a lot of these. Also stopped using paper towels and use towels that we wash, cloth diapers, and did most of my shopping for groceries online. I found the prices for things like flour and basics were cheaper and they ship for free over a certain total. I also get 10% off by using a certain credit card that I have. I have also found a lot of great deals on the local facebook swap pages getting things for free most of the time.
Have you ever thought about creating an e-book or guest authoring on other blogs?
I have a blog based upon on the same subjects you discuss and would
love to have you share some stories/information. I know my readers would value your work.
If you are even remotely interested, feel free to send me an e mail.
Thanks for your kind invitation, wlan. I do have 2 ebooks currently and I’m working on another. And I do guest blogging at AttainableSustainable.net and Fermentools.com. My plate is full at the moment. But I do appreciate your kindness.
Emailed you a booklet I wrote on how to get out of debt about a week ago. We have been debt free for many years. First closed clothing accounts and transferred that amount to paying extra on our car. We cancelled fone contracts and land line and bought pay as you go fones. Mine is a blackberry and costs me R60 per month for fbook,twitter,whatsap and internet. I download free books onto the fone and transfer offline to my laptop. Have amassed a very large library of out of print books as well as many on homesteading skills,theology,archaeology etc. We plant all own fruits,herbs and veggies. Buy groceries from bulk suppliers and buy clothes from cash shops. Do own sewing and cooking and housework. Lots of practical tips and advice in booklet emailed to you
I did receive the booklet you sent this morning. Thanks.
For winter months;
Use solar panels to run electric heaters during daytime. If possible a larger solar array and battery bank to help heat during Night hours.
Use solar heaters in windows- Basically a Highly Insulated box with painted black cans (soda, tin, steel) a hole cut at the top and bottom. Helps heat during the day.
Ceramic Candle heaters; Seen a few posts about these on the web; basically a ceramic flower pot upside down over a candle. *Make your own candles to save $$$
I too, love all these ideas! I started using bubble wrap (reused from packages) to place on all my inside windows. I spray a little water on the clean window, cut the bubble wrap to fit, and place it on the window. Voila! insulated window! I do all the windows except the ones I need to see out of. I’m sure it has saved us moolah each winter.
Awesome.
I switched out my elec water heater for an on demand system….save ALOT on my bill!
That’s on our list this summer. I’m glad to hear that you like it.
This is a bit off topic, but I just have a quick comment regarding the recommendation of switching to a wood burning stove to save money: since it isn’t as common as it used to be, many people don’t know that it will most likely end up costing you more in insurance premiums on your home, or at the very least make it difficult to find a carrier that will write coverage. The surcharge for having a wood stove may end up not being much different than having an alternate heat source. Just something to consider before making a big change! ๐
Yes, you should inquire from your insurance company first. Here there was no difference in premiums between heating with wood or electric heat. But I think in other places there might be.
We love our wood burning stove! We can always find someone locally who wants a few trees cut down during the spring/summer which more that meets our winter needs. When I contacted our insurance company (USAA) they told us that our premium didn’t increase at all because of the stove. It would have if we had a fireplace with open chimney though.
Wood is so much warmer than natural gas, IMHO.
We live in Southern Tasmania and it gets “rather” cold during winter . We have a wood burning stove in the lounge room which will heat up most of the house , however , we have found that the cost of firewood is comparable to being on the grit. Perhaps itยดs actually cheaper for us to be on the grit.
These are great ideas! My partner and I high fived each other every time you mentioned something we already do…we did a LOT of high fiving! People think we’re cheap but we just refuse to spend a lot of money on things…and we do it because we choose to. We currently live debt free sans our mortgage. We carry no debt from month to month, both of our cars are paid off and we are able to live and travel and do things on a limited budget because we’re not tied down with debt. Buying a used car outright and not having a payment each month was the smartest thing I ever did…all thanks to my money smart partner ๐ Awesome article!
High five.
Often times I can find a book I want for 75 cents or less at half.com.
We stopped using plastic wrap & plastic bags. Bought reusable lunchbags & containers. We also started a garden & make our own pickles, we grow some of our most used herbs in pots & dry them for winter. Before we did that, we bought herbs in bulk, it was cheaper. We now buy rice from the bulk section too. Garage & estate sales are great places for finding canning, gardening, clothes, furniture. We make all our cleaning & laundry supplies. It has saved us a lot over a year. We also had dogs before our job loss, to help cut down on expence, we make our own dog treats. I learnded to sew and repair or repurpose torn clothing & bed clothes.
We arevstill a work in progress, but, we are better off than when we started!!!
Donna, you are doing amazing! Keep it up. If there is anything I can help you learn, just let me know.
What I didn’t hear people say about this issue is that Murphy aalwys comes into the picture when you are trying to do something with money. What I mean by that is that something will aalwys seem to occur to make you not want to save money ..you’ll need new tires, you have to fix this, you need to pay that etc Thats Murphy’s law. So save a little while you pay off your bills is smart. The student loan bill is a low interest loan right? The credit card needs to be paid as quickly as possible! If you are eligible for a 401k plan where you work then by all means at least save enough in it to get your employers matching amount. Plus you need to save up an emergency fund ..try this ..save $ 20 each week. After 1 year you will have $ 1080 dollars in savings plus your debt should be a lot less because you have cut your spending and are paying your debt and loan down as soon as possible! Peace
This is such a comprehensive list of frugal ideas! We’ve been debt-free for 3 years now (we live in a parsonage so at this point we don’t have to own a home). We are trying to put aside as much cash as we can for a home in the future!
I notice someone mentioned Paperback Swap and I do like using that too, although sometimes I have trouble finding the books I actually like. I love all the Family Night ideas too!
Thanks for linking up at Thrifty Thursday with The Purposeful Mom and Feminine Adventures!
Hi, Jenn, Thanks for posting your ideas. Have you tried the free Kindle books that I post daily on my Facebook page, yet? They are all homesteading kinds of books related to gardening, or frugal living or other homesteading skills. These are mostly indie published and offered free for a limited time — usually only a few hours. If you don’t yet own a Kindle you can view them on a free Kindle app for your pc or cell phone. (downloadable from Amazon). So they truly are free.
I’ll be back to Thrifty Thursday in the future. It was a really fun link-up.
Cheers,
Chris
I just noticed this reply here! Yes, I have a Kindle app on my PC and on my iPod! I’ll have to check your FB page for the Kindle books you list–I love books for free ๐
I’m not easily impressed. . . but that’s ipmerssing me! ๐
Some ways I save, is to round up my utility bills, so that I have a credit every month. I wait until the credit builds up enough to pay my water bill that month. The budgeted money for the water bill then goes to debt reduction. I do this sometimes with not using the credits until December, so I have extra money for Christmas or gas money to visit relatives out of town.
We have started No Spend No drive Sundays
Coupon savings get put into saving account for future debt payments.
I am thinking NOW of homemade presents for birthdays and Christmas presents, out of stuff that is already at the house or things I can get for free.
1. Tile photo drink coasters.
2. Photo placemats.
3. Tea bag wreaths (tea is free at work)
Hi, Gina, Thanks for stopping by Joybilee Farm. Those are great ideas for saving money and paying off your debt. Hope you reach your goal soon. Chris
Let’s look at your specific quitoesn, Which debt should you payoff first to help my FICO? FICO scores are based off:- payment history (35% of your score)- amounts owed (30%)- length of credit history (15%)- new credit (10%)- types of credit (10%)So, it really does not matter which to payoff first in regards to improving your score. More importantly, pay on-time and pay down debt. The other suggestions are OK in regards to which order to pay.Save some of the advance for an emergency fund (usually 3-6 months of your expenses). Once you pay off a credit card, do not close the account, it helps maintain credit history. Your student loan might be tax deductable and probably has a low rate, just pay the minimum on that one.One last point, it takes a while for your FICO score to change (months/years). Your car repo will stay on your report as long as 7 years, from my understanding and takes up to 80 points off your FICO score.
This past Christmas I cooked and froze meals for my sister and brother in law. I did not have the money to spend on them and both have busy lives so they enjoy being able to take a home cooked meal out of the freezer on nights that they don’t want to cook. They said it was the best present every.
That’s an awesome idea, Rebecca, and really thoughtful. Chris
Well, the answer to this quositen depends entirely on corresponding APRs (Annual Percentage Rates). Many times when you carry balances forward on credit cards, it is at a 20%+ APR. You need to first differentiate between high APR and low APR debt. Credit Card is definitely looked upon by credit reviewers as bad debt . Student Loans, on the other hand, are frequently government subsidized, and even in the case that they are not, they normally don’t have over a 5% interest rate. My advice to my clients is always to pay off high APR debt, and then accumulate liquid savings of about two months of expenses for emergencies. After this point, you will want to pay the minimum on your low interest debt, and invest for your future. Over long periods of time, investing in stock driven mutual funds has shown average returns of over 10% annually. The entire point to this is you could either by gaining 10% per year by investing/saving, or you could be saving 2-3% per year by paying off student loans early. In most situation, the net difference is highly favorable over time.
Buying staples in bulk can be a great way to reduce costs. If you get together with friends to create a buying club and split it all up you won’t have tons to store or more than you can use. Some food co-ops have yearly or bi-yearly bulks buys but you can get a lot of things directly from a big supplier. Manitoba Harvest is one, Mumms Seeds another :).
I love all of these. Some I dont do anyway. I cant believe I wasnt frugal a long time ago lol
Great ideas. I also save money on the books I read by using http://www.paperbackswap.com . They also have sites for cds and dvds. I have saved several thousand dollars over 5 years by getting my books this way (I read a lot!!)
I hadn’t heard of paperbackswap.com, Susan. Thanks for sharing this. I love reading. Chris
Thank you for sharing this post on Frugal Days, Sustainable Ways! I will be sharing this on my fb wall.
Thanks, Andrea. That’s awesome. Thanks so much for your support. Chris
Great tips! My favorite is #43. If we don’t expose ourselves to consumerism, we’re more likely to be savers than spenders. It also helps to surround ourselves with like minded friends.
Right on! Support from our friends is really important, Barb. Thanks for commenting. Chris
Wow!!! So many great ideas here.. sharing this with my husband.. we have a lot of BIG financial goals for 2012. Thank you!
Good luck with your goals, Kylie. We found that making the decision to live debt-free was the first step in actually achieving it. And it definitely is necessary to have both you and your husband striving for the same thing. Chris