How to Save Money to Help Get Out of Debt

Much advice is available about how to save money to help get out of debt. The main point of all advice is aimed at reducing debt either by increasing income, managing money better or manipulating existing debt to try to reduce that debt.

It is important to apply any savings immediately toward paying off debts rather than using it for new purchases or other expenses. The best advice is definitely to get started!

Ways to Increase Income:
1. Get a second, third or part time job to boost your income at least temporarily
2. Sell something you already have – have a yard sale, sell on auction websites or resale stores
3. Sell something you make or purchase in bulk at a profit – online, consignment, retail
4. Marry someone with money (not necessarily a joke) and without debt overload
5. Cash in some financial asset to pay bills – IRA, retirement fund, savings, precious metals or collectibles
6. Cut expenses, use coupons, stop spending and live on less until debt is paid off

Ways to manage money better:
1. Learn to create and use a monthly budget and long term planner
2. Transfer high interest debt accounts to lower interest debt accounts
3. Transfer low interest savings accounts to higher interest saving accounts
4. Do research to learn more about money and investing

Ways to manipulate existing debt:
1. Refinancing your mortgage at lower interest and/or shorter time
2. Get a debt consolidation loan or join a debt reduction program to reduce interest/balances
3. Adjust income tax deduction number to provide more income rather than a large refund
4. Negotiate with lenders for a break on interest or balances

When paying off debt, there are two schools of thought. One is to pay the highest interest rate debt off first. The other is to pay off the smallest debt first and then continue to take what was that monthly payment and apply it to the next largest debt.

The goal here is to keep the amount paid toward debt the same every month, but when one bill is paid off, continue to use that payment amount stacked onto another bill payment amount. Eventually the entire “monthly payment toward all bills” goes towards the last remaining bill and should help pay it off sooner.

Remember, the foundation of all wealth management advice is that there’s no point in saving money in one area if it is not applied directly to debt reduction.