When budgets are tight, trying to increase debt payments can seem overwhelming. When we first started trying to find ways to put more money towards our debt, we thought there was no where else in the budget to cut from, until I started nitpicking our budget apart even further. Here are 6 things I came up with that we started implementing. Some of them you may already do, but hopefully some are fresh ideas that can help you increase you debt payment.
Use Your Raise
When Hubs gets a raise, I put the money into a separate savings account each week. It’s money we didn’t have initially, so it’s not like we’re going to be missing it either. For us, this is one of the easiest ways to we’ve increased our debt payments. However, be sure to learn from my budgeting mistakes and only set aside what you can within reason.
Round Up on Bills
When I budget bills that vary month to month, like our electric bill, I budget on the high end. For instance, I always budget $145 per month for our electric bill because it’s the highest amount we’ve had due since moving here. The only times our bill is close to the budgeted amount is in those dog days of summer when the air conditioner and fans are running nearly all day. Most of the year it’s between $95-$115 per month, leaving us with an additional $30-$50 to put towards debt each month.
Don’t use just the bigger bills either. Some months my our internet bill is $0.95 less than what I’ve budgeted. Even though it’s less than a dollar, I keep the money set aside for debt. Over the course of the year, that’s $11.40 that I’ve reduced my debt by, and $11.40 I’m not paying later. Every little bit helps.
Use Your Shopping Savings
This is similar to the previous step. Let’s say you budget out $150 a week for groceries and household items, but between coupons and store savings you only spent $125, put the other $25 towards debt. I personally only use this on a monthly basis because our needs and store sales vary week to week.
ATM Fees
I don’t usually go to the ATM; I prefer to get any cash we will use through the month as cash back during a grocery transaction. But sometimes I can’t get the amount I need due to withdrawal caps at certain stores. Our credit union doesn’t have physical, brick & mortar with ATM locations either. Instead, they utilize a few banks within their network so that I do not encounter a fee. If I’m not near one of their network ATMs, or I do happen to be charged a service fee, my bank will reimburse the fee at the beginning of the following month. Since the money is already gone, and it wasn’t missed in the first place, I put that money towards our next debt payment.
Interest Deposits
Our credit union accounts {savings and checking} earn interest on the month’s average balance. This may not be the fastest way to get debt paid down, but a $0.07 paid now is $0.07 I’m not paying later. I’ll take any small amount to pay towards debt that I can, even if it’s only a few pennies at a time.
Save Change
I can’t be the only one with mounds of change throughout the house, the car, in oddball places. Depositing the change in a bank account and using it to pay off debt gives it a lot more purpose than taking up space in the house. Or car. Or whatever oddball places you happen to have change lying around. Cash them in, deposit them in your account, and use that amount to pay off debt.
How do you put extra money towards debt without breaking your budget?
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