how to save money

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Sometimes your spending spirals out of control. Once you realize that you've lost control of your debt, you need a plan of action to get your finances back on track. No matter what situation you're in, the relief of a debt-free life is a feasible goal. Take these simple steps to assess and then improve your personal finances.

Be Realistic

If you've been burying your head in the sand, it's time to face facts. "A lot of people will say they've got a certain amount of debt — $9,000, let's say — when in reality, it's $11,000 or $14,000," Cate Williams, Vice President of Financial Literacy for Money Management International, told CreditCards.com. She's right, of course; it's impossible to hit your target if you don't know what you're aiming for.

Action step: Write down your debts, including the interest rate, on every card you have.

Pick Up the Phone

Speaking of those interest rates, getting them lowered can be as simple as picking up the phone. Get on the horn, as they say, and ask nicely. Even a reduction by a point or two can earn you big savings.

Action step: Here's a script for exactly what to stay on the phone with credit card customer service.

Pick Your Strategy

Paying off credit card debt is not a game of chance. You'll need a strategy to lessen the financial burden you're carrying month to month. What are your options? Think of snow:

  • The Avalanche Method: You pay off your highest interest card first, erasing your debt as quickly and efficiently as possible. With this method, you'll save hundreds or even thousands on interest charges in the long run. The downside is that it's arguably the most painful to execute. Action step: Make minimum payments on all of your cards except the one with the highest APR. For the card account with the highest APR, pay as much as you can afford. When that card is paid off, apply that same amount to the card with the next highest interest rate.
  • The Snowball Method: What the avalanche saves you in money, the snowball saves you in morale. What this method offers is a psychological advantage. If paying off the smallest balance first will give you the confidence and headwind to carry out your debt payments, then this method may be for you. Action step: Make the minimum payments on all your accounts except the one with the smallest balance. For the card with the lowest balance, pay as much as you can afford. When that card is down to zero, repeat the process by paying the same amount to the card with the next-lowest balance.
  • The Blizzard Method: You combine the best of both strategies by paying off the smallest balance first and then moving on to wipe out the highest-interest balance next. Combine the best of both, and you've got a blizzard.

"The avalanche saves the most money, but some folks prefer a quick win with the snowball method," Beverly Harzog, author of The Debt Escape Plan, tells Credit Karma. "The blizzard combines both — you get the emotional boost and then you can save money by using the avalanche."

Transfer Your Debt to a 0% Interest Card

You may be able to tackle your debt with no interest at all by transferring a high-interest debt to a single card using a balance transfer. Many balance transfer cards allow you to pay 0 percent interest on your balance for a set amount of time, allowing you to pay more toward your principal and reduce the overall amount of time it'll take you to wipe out your debt.

Action step: Check out NerdWallet to see what the current best cards are.

Make a Budget

You need to figure out where your money is going — aka how you got into debt in the first place. Harzog, who paid off more than $20,000 of her credit card debt, says it takes persistence, self-discipline, and "a darned good budget."

Action step: Sign up for Mint.com or You Need a Budget to help you assess your spending and set up a plan.

Cut Back

Remember the cabbage soup diet? Remember how after three days you were ready to scarf a large supreme pizza? The same principle is at play with living on a budget and paying down debts. An extreme strategy with zero flexibility could quickly activate your desire to rebel and spend more than you can afford, putting you right back where you started.

"Cutting back can be more effective than cutting out," Gail Cunningham, the former spokeswoman for the National Foundation for Credit Counseling, told CreditCards.com. "It's hard to adjust your lifestyle too dramatically, and often, little adjustments can add up to big savings."

Instead of making a No Dining Out rule, limit restaurant visits to once per week and cap your drinks at two. Instead of cutting the cable cord altogether, cut out the premium channels; don't go without heat, but try lowering the thermostat by a degree or two.

Action step: Write down three ways you can cut back on some of your splurges and downgrade or cancel some of your services starting today.

Put Your Credit Cards on Ice

We mean that literally. Put your credit cards in a cup or bowl of water and place it in the freezer. You'll still have the card(s) for emergencies, but they won't be in your wallet. Clear any stored credit card data off your computer, too.

Have a Smart Social Life

Derek Sall paid off $116,000 worth of debt before age 30 when he stopped trying to keep up with his friends, especially the luxury-filled highlight reel social media versions of their lives.

"The best tip I can give is just live your own life," Sall told CNBC. "The best way to just live simply and be content is just to turn it all off and hardly pay attention to it at all. Because that's what gets people in the most trouble. They see 'Oh, my friend went on this great vacation, and I wish we could do that!'"

Action step: If you need a digital social media detox to limit the visual envy and distractions, delete the apps off your phone.

Stay Focused

Remember why you're doing this. Will paying off your credit card debt allow you to save for a down payment on a house or stop panicking when you open the mailbox?

Action plan: Write your goals down and tack them to the fridge or bathroom mirror. Put a picture in your wallet of your dream house or something that represents financial peace to you. Join a money-saving community on Facebook or post regularly to forums where you can vent, be motivated, and remember you're not the only one in your position.

Keep Healthy Financial Habits

As you pay off your debts, think about healthy spending and saving habits. In particular, practice differentiating between wants and needs. Food and shelter are needs; bills and emergency funds are, too.

But wants are those ads you see on Instagram, a $14 French martini, a new spring blouse. When it comes to spending, make sure your needs are taking precedence over your wants.

Action step: You made that budget. Stick to it.

"Staying out of debt isn't a big mystery," Regina Blackwell, a certified budget counselor at credit counseling service Transformance, tells Credit Karma. "Account for your money. Live within your means. Don't spend what you don't have. After becoming debt-free, apply the lessons you've learned and work toward the establishment of healthy financial habits."

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Ever woken up with last night's makeup still on, an uneaten slice of pizza on the bedside table, a jackhammer in your head, and an account balance that only adds to your already building nausea? Ever spend way too much on take out because you're just too exhausted from your job—that doesn't pay you nearly enough for your long hours—to cook? Or maybe, tired of the unhealthy work/life balance your company offers instead of benefits, you spontaneously booked a plane ticket to some Instagram worthy island, and decided you'd figure out the money part later, after all, everyone on Instagram seems to be on vacation. We get it, and we don't blame you.

Being a young professional in 2019 means a whole host of challenges your parents never had to worry about. Between the toxic culture of non-stop productivity, mounting student loan debt, the tendency many companies have to take advantage of millenials, and the way social media forces you to compare yourself to your peers; it can feel like getting ahead financially is a losing game. And when that non-stop stress builds to a breaking point, it's understandable that you may start to let financial best practices fall to the way side in order to stay sane. Your mom is going to tell you the same thing over and over: budget, don't go drinking, eat at home etc. and while that's all good advice, the truth of the matter is your life isn't simple and the world is changing around you all the time. With the specific struggles of the average millenial in mind, here are our top financial tips for people just starting out in, what baby boomers would call, "the real world."

Take a Course

We know, this is adding another expense to your already tight budget, but we promise if you can find the money for an online course in basic finances or economics, it's worth doing. It's absurd that people are just suddenly expected to emerge from college fully equipped to handle things like taxes, budgeting, and investing, when just a month before they were eating ramen in a dorm room doing homework for a class called "the post modern implications of beekeeping." There are even some free options out there.

Get a Cheaper Apartment


We know, sometimes this just isn't an option, but be honest with yourself, how hard did you look for a more affordable apartment? Or did you just make whatever work so you didn't have to think too hard about it? In many cities, there are options for rent controlled apartments, and even housing lotteries to help you take your money farther. As a good rule, housing should be 30% of your income. If it isn't, or that just isn't a possibility for you right now, think about how you can cut down on costs of living. Could you get another roommate? These kind of savings are ideal, because they don't require will power to maintain the way so many financial tips do.

Take Risks

Yes, we know this sounds counterintuitive, but there is something to be said for making investment decisions that don't exactly feel safe. Millenials have been told their whole lives to be careful with money and to work hard to hang on to material security, but the problem with playing it safe is you're very unlikely to see any returns. Investigate the options you have for your savings, and don't be afraid to make minor mistakes, afterall, there is no better way to learn.

Don't Depend on Your Credit Cards


A classic mode of budgeting back in the day was to get all your monthly spending money for the month in cash, divide it up into envelopes (groceries, eating out, drinks, entertainment etc.) and then if the money in the envelope runs out before the end of the month, well, that's that. Most millennials rarely carry cash, but maybe it's time to consider going old school. If you take a certain amount of money out of your "going out" envelope before a night at the bar, you're much less likely to get carried away than you would be with a debit card on an open tab. Once the cash is gone, you know your budget for that particular area of your life is used up, and you're less likely to accidentally overspend.

Pay into an Emergency Fund

Many millenials report having very little back up plan were they to suddenly lose their job or suddenly need a significant amount of money. To avoid this situation, follow the age old rule: pay yourself first. That means pay into your savings every paycheck, even if it's just a small amount. Most importantly, this practice creates good habits of saving, and you'll begin to understand the satisfaction that comes with watching a savings account grow.

Mattermark.com

Everyone wants to save money, but life on a strict budget can start to feel like an exercise in misery.

But living paycheck to paycheck is also exhausting, so how can you save money without making life boring? To help you with this balance, we've gathered the easiest tips and tricks for saving money with relatively little hassle.

Buy Generic

Most people think that buying the store brand cereal means a decrease in quality, but in reality most generic products come from the same factory as the name brand, meaning you get the same product for serious savings.

Buy Bulk

If you know your family is going to go through X number of toothpaste tubes in coming months, why not stock up all at once? Buying bulk is usually cheaper than buying individually, especially as big box stores like Costco, so look for deals when it comes to the non-perishable goods you know your family will use.

Consolidate Debt

Take advantage of historically low interest rates to pay off high-interest debt, and save you and your family a bundle.

Only Eat Out on Special Occasions

Make a dinner out with your significant other an intimate date night saved for special events. Chances are you won't really mind giving up your $11 salad that you rush to eat on your lunch break. Start brown-bagging your lunches as often as you can, and watch the savings grow.

Maintain Your Car

A well maintained car is an inexpensive car. If you ensure your tires are properly inflated to increase gas mileage and that you're regularly checking all of your cars systems, you can avoid preventable (and expensive) problems from occurring and keep your car on the road as long as possible.

Get a Cashback Reward Card

If you have a credit card already, why not get one with benefits? For the best savings options, choose a rewards card that offers a percentage of cash back for every dollar you spend.

The holidays should not be about fender benders in mall parking lots, going broke on overnight shipping for last minute gifts, or racking up credit card debt. They should be about not fitting into your pants come the New Year.

Just kidding. (Kind of.) In addition to eggnog and star-shaped cookies, the holidays are about love and family and togetherness. And yet Americans are planning to pull out out their wallets early and often. A Gallup poll found that US adults estimate that they will spend about $885 on gifts in 2018, with a third of respondents planning to spend at least $1,000.

Now, add a little bit more to the balance sheet, since we tend to underestimate our spending. With big, tempting sales on every page of the internet, impulse buying and overspending are hard to avoid. In December of 2017, 24 percent of millennial shoppers reported they hadn't paid off their credit card from last Christmas.

Don't let this be you. Nix the stress of overspending by sticking to these guidelines.

Set a Budget

Credit Cards

Without an idea of how much to spend, the chances of overdoing it — oh, look at these cute elf-shaped pancake molds! — are as high-flying as Santa's sleigh.

Scott Hannah, head of the Credit Counseling Society, told Canada's Global News that a reasonable gift budget is around 1 percent of your gross annual income.

But if even that allowance seems too high, don't be afraid to slash it. Gifts aren't necessities, and there are a lot of variables and discrepancies that would make reasonable spending plans for families with similar incomes look very different, said Hannah.

Factor in Gift Wrapping

One budget line item you need to include is money for gift wrapping and cards. Those $5 letterpress beauties add up fast.

One of IKEA's best kept secrets is their holiday wrapping, and who doesn't love a classic and homespun brown butcher paper tied with a red yarn bow?

Make a List, Check It Twice

me & my BIG Ideas

Now it's time for the nitty-gritty. Make a list that includes: who you're buying for, what you're buying, and how much you'll spend in total. That last figure is key. It should equal roughly 80 percent of your budget, advises Chime, to allow yourself a little wiggle room.

Band Together

The perfect, perfect gift can sometimes come with a price tag that's beyond your budget. See if you can get a few relatives or friends to "go in" together on a special gift with you, advises The Spruce. The lucky recipient would surely rather have that Hudson Bay blanket they've always wanted instead of four smaller gifts they don't need or desire.

Nix "One for Them, One for Me"

Nearly 60 percent of people indulge in "self-gifting," reports the National Retail Federation, spending $130 on ourselves on average. When hitting stores for gift cards, 72 percent of shoppers report getting something for themselves before checkout.

Money-saving master Scott Alan Turner institutes a "no shopping on Amazon for yourself" rule for the month of December.

"If I want something, I can add it to my wishlist or ask for it for Christmas. Our rule also helps avoid splurging and spending less," he advises. "This is the season for giving, not receiving. If you find something you can't live without, add it to your wishlist. If nobody buys it for you, pick it up on sale after Christmas for yourself."

But….there are some killer sales right now and you really do need a new down coat. Far be it from us to say don't treat yourself, but be aware of how much you're spending on yourself when shopping.

Shop Early

Start now! Make your list! Make your budget! You'll be able to get the gifts you want sent via slower and cheaper shipping. The real crusher is when you wait and have no choice but to cough up for overnight shipping costs.

Don't Lose Your Mind With the Kids

Try Scott Alan Turner's rule of four: Give one want, one need, one wear, and one read.

Remember Your Intentions

Forgive the corny sentiment, but 'tis the season: it really is the thought that counts. This time of year, remember what's truly behind each gift you give.

"The point is to acknowledge that other person's positive influence on your life," writes Jennifer Wolf at The Spruce. "'Thank you' and 'I love you' are phrases that don't come with dollar amounts attached to them, so don't allow yourself to be caught up in spending more on holiday gifts than you can afford."