New York Life | September 19, 2023
Household debt in the U.S. continues to rise, led by an increase in credit card balances.1 It can be challenging to pay off debt and save at the same time, but it is possible. Here are some tips to help you get started:
1. Create a budget.
This is the first step to understanding your income and expenses, and where your money is going. Once you have a budget, you can start to identify areas where you can cut back.
2. Prioritize your debts.
Not all debts are created equal. Some debts, such as credit cards, have high interest rates, while others, such as student loans, may have lower interest rates. Make a list of all of your debts, including the interest rate and minimum payment for each. Then, prioritize your debts, paying off the highest interest debts first.
3. Make more than the minimum payment on your debts.
If you can only make the minimum payment on your debts, it will take you longer to pay them off and you'll end up paying more in interest. Try to make more than the minimum payment on your debts each month, even if it's just a little bit extra.
4. Consider debt consolidation.
If you have multiple debts with high interest rates, you may want to consider debt consolidation. This involves taking out a new loan to pay off all of your existing debts. If you can get a lower interest rate on the new loan, you can save money on interest and make it easier to manage your monthly payments.
5. Set savings goals.
Once you have a budget and have prioritized your debts, it's time to set savings goals. How much money do you want to save each month? What are you saving for? Having specific savings goals will help you stay motivated.
6. Automate your savings.
One of the best ways to save moneyis to automate your savings. This means setting up a recurring transfer from your checking account to your savings account each month. Thisway, you'll save money without even having to think about it.
7. Cut back on unnecessary expenses.
Take a close look at your budget and see where you can cut back on unnecessary expenses. This could mean eating out less, canceling unused subscriptions, or shopping around for lower insurance rates.
RELATED CONTENT
Go back to ournewsroomto read more stories.
