If you’re just getting started on the journey to better your finances you might think the first step is to start throwing any extra money you have at your debt to pay it off faster. But I recommend you begin by saving at least one thousand dollars first before tackling debt. It’s important to have an emergency fund so that when the unexpected happens you have the money to cover it. Otherwise you’ll end up pulling out your credit card and adding to the debt you’ve been working so hard to get rid of!
For some, saving one thousand dollars may seem like an impossible task. However, if you find ways to make extra cash, cut back on expenses, make a few sacrifices, and stay disciplined, you’ll find that it won’t take very long to accomplish this goal. Below are some ideas to get you started!
Make more money
Ask to work overtime or increase your hours
Many companies consistently have more work than staff and would be happy to get more hours out of you.
Rent out a room in your house
If you have a spare room, renting it out can make you a few hundred extra dollars each month.
Sell items in your house
Find things you don’t use anymore and list them on Craigslist, eBay, Facebook Marketplace, Letgo, or any other listing site.
Find banks that will pay you to open an account with them
Just make sure there aren’t any fees associated with it and that there is no minimum balance requirement.
Cut back on expenses
Eat your way through the food you already have on hand
Promise yourself you won’t spend more than $25 per week of fresh groceries until you’ve eaten most of what you already have in your fridge, freezer, and pantry.
Cancel any subscriptions or memberships you don’t use
Are you using that gym membership consistently? Do you really need Netflix and Hulu? If you don’t need it or use it, cancel it!
Shop around for a better home or auto insurance rate
Check out competitor’s rates and try to bundle home and auto for a bigger discount.
Stop investing in retirement or college savings accounts for now
Investing is important, but if you’re paying more in interest than your investments are earning then you’re still in the hole. Stop investing until that $1,000 is saved and your debt is paid off.
These are just a few ideas to get the ball rolling on saving that $1,000. I’m currently offering a free master list called How to Save $1,000 Fast! It’s jam packed full of ideas to make more money and cut some expenses so you can get your emergency fund saved and be on your way to paying off debt. All you have to do is sign up here and you will receive this free list in your inbox. Once you have that safety net saved up, you’ll have more peace of mind as you work toward becoming debt free.