5 easy steps you can take to reach your savings goals
Written on May 15, 2011 by Wiley Hayden
Can you really save money if you have a lot of credit card debt and other bills?
While it may seem impossible to build a nest egg with all your other financial obligations, there are things you can do to reach your savings goals.
- Review: Carefully review your income and spending to determine exactly where your money is going. Do whatever you can to trim your expenses, including cutting services you don’t need or use, switching utility plans, cutting out impulse shopping trips, etc. The money you cut from your budget can go toward debt reduction or savings.
- Consolidate: Consolidate credit card debt and other bills to cut down on interest charges. Paying less interest over time allows you to allocate more income to paying down debt or adding to savings. Obviously, once your debt is paid off, there will be more money available to boost savings accounts.
- Get Counseling: Use a debt counseling service to get your finances back on track. If you’ve done everything you can to save money and pay off debt with little results, you may need help. Debt counseling can help you learn to budget and manage your money better. Look for a reputable debt counseling firm that clearly describes its services and fees before you sign up.
- Negotiate: Negotiate a debt settlement with creditors to get a lower payoff amount. Generally, credit card companies won’t begin to discuss a debt settlement program until you’re at least two months behind on payments.
- Save: Once you have paid off credit card debt and other loans, redirect money that previously went toward debt payments to your savings. Set up automatic deductions so that part of your paycheck goes directly toward your savings goal.
Having a lot of debt can keep you from reaching savings goals. Debt reduction should one of the first steps toward building a savings. Once you’ve knocked out that debt you can get down to the real business of putting away money for various savings goals.
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