You’ve heard of the snowball plan to repay debt, right? In a nutshell:
- Pay the minimum balance on all your debts except the one with the highest interest rate (or lowest balance, depending on who you talk to).
- Every month, pour all your free money into that debt’s payment for as many months as it takes to repay it.
- Tackle the next debt on your list. You’ll apply the amount you paid into the newly repaid debt into the monthly payment for the next debt. That’s where the term “snowballing” comes from – because the amount you apply toward debt repayment grows as you repay each debt.
- Continue until all your debts are repaid.
Snowballing makes sense, and it works even better when you add extra snowflakes to your snowball each month. Try three creative ways to save money and get out of debt faster.
Freeze Your Credit Card
Many financial advisors suggest waiting 48 hours before you buy an unplanned purchase. But that’s a hard principle to follow when you carry your credit card in your pocket. Freeze it instead, and reduce your risk of making impulse purchases. Just think of all the money you’ll save when you don’t buy all the tools or shoes you see!
Lower Your Monthly Bills
Do you ever closely inspect your utility bills? Start by looking for unauthorized charges. Call your utility company immediately and ask for the charges to be removed. Next, call competitors or check out WhiteFence to find more affordable rates. Use those rates to bargain with your utility company. They may be willing to match their competitor’s rates or offer a loyalty discount to keep your business and lower your monthly bills.
Of course, you’ll save even more if you cancel services you don’t need.
- Drop cable. Watch TV online with Netflix or rent videos from the library.
- Cancel your landline. Install MagicJack or use your cellphone instead.
- Downsize your lawn service by landscaping yourself.
Can you think of any other monthly services you can cancel or downsize to add snowflakes to your debt snowball?
Maintain Your Stuff
Your household will save tons of dollars by simply taking care of the things you already own. Then, you won’t have to buy new stuff when your old stuff breaks.
- Clothes: Wash your clothes in cold water, wear everything but socks and undies a few times before washing them and dry everything on the line. Your clothing will last longer, and you’ll save money.
- Car: Schedule regular maintenance on your car. Write oil change and tire rotation dates on your household calendar so that you don’t forget. And keep those appointments!
- Appliances: Follow the manual for using and cleaning them, and barter any regular maintenance or repairs with a friend when you think your washing machine or dishwasher is on the fritz.
- Furniture: Polish is your friend. Tenderly remove dust and debris from your furniture every week to enhance its shine and make it last longer. And banish kids and pets for your upholstered items. Setting up a play area in the basement or backyard is much cheaper than reupholstering your furniture every year.
What other savings methods can you think of for your household? Remember, getting out of debt relieves stress and sets your family on solid financial footing for whatever the future brings. Start looking for ways to save today, and add those snowflakes to your debt snowball now!
By Jen T. Today’s Free Stuff Contributor