Most Americans are carrying some sort of debt- mortgage, car loan, student loans, credit cards, etc. Most Americans also have trouble saving for emergencies or trying to meet other financial goals. It can be challenging to save and pay off debt when they are both needed.
Read below for two ways to save while you are paying off debt.
Easy Savings Plans
While most of your focus should be on getting out of debt quickly, try not to ignore your savings. Make sure you make your minimum credit card payments and then try for one of theses savings plans to help you save while paying down debt.
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A savings staircase is all about steady jumps. One example would be to save $1 everyday for a month. The next month you will climb up another stair. So, in month two, you save $2 everyday for that month. However, in the middle of the year it’s a good idea to climb back down the "savings stair" interval. The savings amounts would be too high to tackle while getting rid of debt, if they continue to escalate. You don't want to overextend while trying to pay down debt and save.
If you followed this for an entire year, you would save:
This gives you a grand total of $1,280. That is a great emergency fund.
Finally, a savings ripple gets bigger and bigger.
Just increase your monthly amount by $10 each month. Here is an example for the year:
The total is $780.
This might be a great way to save for the holidays. You can reverse the amounts and start with the $120 in January and then get lower as the holiday shopping season approaches if that is easier.
These simple options can help you on the pathway to financial freedom, saving money and owning your finances.