When you start your debt-free journey, sometimes it can be hard to find ways to increase your debt payment when it feels like your budget is already strained. Here are 5 simple ways to increase your debt payment without feeling like you’re breaking the bank.
Round Up Your Budget
One thing that I like to do when I set up my budget is round up the amounts on my utilities to the highest amount they’ve been. For example, my electric bill varies between $85 in the winter (I have a wood stove for heating), and $150 in the summer when the ACs and the pool filter run non-stop.
Throughout the year, I will budget $150 on my electric bill; when it is lower, I use the remaining amount that was budgeted to add to my debt payment. Some months it’s only a few dollars that gets added, and other months it can be upwards of 60 dollars. It isn’t money that will be missed from the budget since it was already allocated to a different expense, and it is money that still went to achieving my financial goals.
Reduce Your Expenses
One of the simplest ways to increase your debt payment is to decrease your expenses. When you learn how to effectively track your expenses, you can easily identify the areas where you can reduce, or even eliminate your spending.
Are you paying for two music or movie streaming services? Cancel the one platform you don’t use as often. Is there a cheaper alternative for a phone plan? Keep your number and swap phone providers. Do you work out at home now and still pay for a gym membership? Cancel it. All the small savings on non-essential expenses add up to more money to go toward paying your debt off faster.
Use Your Raise (Or Any Other Unexpected Income)
Whether through a bonus, a raise, a side gig, or freelancing, or even selling unused items online, every extra dollar that you earn can go to your debt repayment. Not only does sending every extra dollar help reduce the amount of time you are repaying your debt, but it also helps you avoid lifestyle creep that can happen as your income rises.
Review Your Budget Regularly
Much like reducing your expenses, performing a regular budget review helps you stay on top of what expenses need to be adjusted. If you are regularly budgeting $400 a month for fuel, but you have been spending $350 a month consistently for the last three months, you can adjust your budgeted amount for fuel to $350 a month, and add the other $50 to your minimum debt payment.
This method can be used for any area of your budget. When you regularly review your budget, you can see patterns and trends within your spending; seeing which categories may need to be increased, especially if you are feeding multiple teenagers, or which categories may need to be decreased.
Use Your Change
This method is a lot like rounding up the amount that you budget for your bills. But I like to see it more like completing a Save The Change, $1 Challenge, or a $5 Challenge. The major difference here is that you use your change on your everyday expenses, and add that to your debt payment. Whether you use a cash budget or choose to use debit, you can easily round up the expenses to the nearest $5 or $10 increment, and add it to your debt payment.
What is your favorite way to increase your debt payment without breaking the bank? Let me know in the comments below!
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