Debt is sometimes inevitable. I have had my share of experiences and what matters is how you handle the situation. Do you have any outstanding debts that are weighing you down such that you don’t know if you should save or pay up? The fantastic news is that it is possible to save even when you are in debt. Unbelievable, right? Well, stick around to find out some of the incredible ways.
How Much do You Owe?
The first step towards the saving journey is having a list of your debts. Have a list of all your debts inclusive of their interest rates. Having the exact amount you are expected to pay is a starting point towards knowing how you will pay the debts. Sometimes, if debts are now well-managed, they end up affecting our kids’ future as they may not have access to most basic amenities. Therefore, the list helps you think of ways of paying up. Identify which credit cards have a higher interest rate and prioritize on paying them first.
Get an Emergency Savings Account or Fund
Having a family is not easy I must say. It comes with its own challenges. When you are in debt, it is crucial that you are able to come up with a payoff plan that is flexible. Creating an emergency savings fund is convenient especially when you know you have to make monthly deposits. In cases of emergencies, you will comfortably withdraw from the fund without getting into more debt. For example, your young one may be in need of emergency medical attention. Your insurance plan may not cover all the expenses which mean that you have to chip in. The emergency fund will be a life saver at such a point.
As a family person, I have learnt the art of being keen on how I spend money. With kids, it’s just impossible not to budget at all. This is because you will find yourself overspending most of the times. I know saving money is not easy especially because there are so many unforeseen events that may lead you more into debt. However, it’s to have a monthly budget so that you know when you are about to overspend. The Benefit is that it will help you keep track of your expenses and know how to minimize them.
Monthly Payment Plan
Personally, I would recommend that you come up with a debt payment plan that will help you balance your income versus the debt. Mostly, get to know what your child’s needs are and the family as a whole. Once you have all the expenses listed down, you will be able to know how much money you can comfortably pay the debt with.
Identify Unnecessary Items
How many items do you own that you no longer need? Most times we find ourselves with items that just take up space, and nobody even uses them. For example, your kid may no longer need that baby walker because they are all grown up, and you don’t plan on having more kids. Why not sell them on online platforms like eBay? Identify items that you don’t need and put them up for sale. You may even have an old phone that you no longer use; get stores that recycle old phones and dispose of the phone. This way, you save space, money and you comfortably pay your debts.
Paying debt is never an easy task that’s for sure and you can find more resources here to work on your credit. However, the joy that comes with you clearing them all is what matters. On a light note, when you pay any debt, get some money that will not interfere with your budget and take your kids out or get yourself a new hairdo. That will act as motivation for you to continue saving as you pay off your debts.