Week 23: 7 Ways To Save Money On Groceries & Household Expenses

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You are reading Week 23 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

We will continue throughout this series to focus on the multitude of ways you can create funds in your budget to pay off debt. Here are 7 of the most common ways to save money on groceries & household expenses. Each of these methods is just one more step toward getting out of debt and finding financial security.

7 Ways To Save Money On Groceries & Household Expenses:

1. Use coupons and savings apps. Right away you have free and easy savings on food, household and health supplies just by using coupons. There are tons of options for savings that can easily cut your grocery bill by 50% or more. Savings apps are also great options if you aren’t into clipping the coupons. There are many stores with rewards cards or savings apps that you can scan at check out or upload receipts to and get cash back on your purchases.

2. Make your own household cleaners. Homemade laundry detergent, fabric softener, hand sanitizer, all purpose cleaners, natural bleach solution and more are easy to make for often times half the cost. This also results in a safer and more green home.  I have a post on how to make your own frugal green cleaners from your kitchen – no extra supplies needed.

3. Drop cable or satellite. We will mention this a lot throughout the year, but we often spend money unnecessarily on entertainment each month. Cable and satellite can be upwards of $100 per month. Instead invest in the $99 per year for Amazon Prime that offers free movie and television show streaming along with tons of free books, music and shipping.

Alternately, you can pay low monthly fees to places like Netflix and HuluPlus for streaming services.  We have a Roku for streaming movies on our TV, but I’ve heard the Fire TV Stick is a good option.

4. Go to prepaid cellular phone service. You can easily find prepaid cell plans that are a fraction of the cost of your current contract plan. Crunch the numbers and make a choice to go with prepaid in the future.

My sister-in-law recently switched to this option.  She’s saving a ton of money, has a phone and texting abilities while on the go, and uses her iPad for messaging while connected to WiFi at home.

5. Menu plan or use freezer meals. Last minute drive thru purchases or wasted food in your refrigerator are some of the biggest frivolous expenses in your grocery budget. Create functional menu plans and utilize them or freezer meals to guarantee meal time is smooth and you aren’t wasting food that is being thrown in the garbage.

6. Carpool when available. Gas prices yo-yo up and down all the time. Carpooling with your spouse, neighbors or friends to and from work can split expenses easily. It can also come in handy for taking kids to school, school events, practices and other after school needs.

If there is no carpool in your area, simply work hard to make sure your time out and about is used wisely. Plan your trips for errands well so you aren’t back tracking or making multiple trips when unnecessary.  Read these 6 tips for saving money on gas now.

7. Change the temperature on the thermostat. One simple way to save money on your heating or cooling expenses is to set your thermostat differently. In the summer set it at 78 degrees and wear looser lighter clothing while utilizing small fans or ceiling fans instead. In the winter set it at 68-72 degrees and add layers of clothing, throws, blankets and alternate heat like wood burning stoves as needed.

These ways to save money on groceries and household expenses are simple things anyone on any budget can evaluate and change. It’s often the little things like this that add up quickly to create hundreds of dollars per year to pay toward your family getting out of debt.

Week 23 Challenge:

Pick one new way to lower your expenses.  Start using coupons, shopping sales or driving less.  Adding in just one of these new habits to your daily routine can increase your savings over time.

What are simple ways you can reduce your monthly expenses?  Share with us your ideas.

7-Ways-To-Save-Money-On-Groceries-&-Household-Expenses

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 22: Knowing When You Should Refinance Your Mortgage

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You are reading Week 22 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

So far this year we have covered budgeting, negotiating terms with your creditors, and even getting serious about your expenses. This week we are going to look at knowing when you should refinance. This is topic is usually looked at when you are working on your credit score, debt relief or simply trying to be more responsible with your money.

When interest rates have dropped significantly. Watch interest rates on housing mortgages. If you purchased at a higher rate than is currently available, you may wish to consider a refinance. Being able to get a significantly lower rate can offer you thousands of dollars in savings over the course of your mortgage repayment.  This can lower your monthly payments as well as the overall amount you have to repay.

When refinancing would give you funds to pay off debt at higher interest rates. While you may hate to extend your mortgage, there are often options to use your equity to actually finance for more than the original loan and give yourself funds to pay off debts that are carrying a higher interest rate.

When you are in debt and have decent credit, but feel yourself struggling to keep on top of everything, a refinance to get money that will pay off other debts can be a great choice. In the process, you must establish better financial practices and not recreate the debt you just paid off.

  • Make sure it is fixed interest rate and has no balloon payment.
  • Remember you can always pay more to your principle each month than what is owed.  Don’t go for a shorter term loan that will lock you in on paying a higher monthly or bimonthly payment.
  • Make sure the loan repayment will be lower than your current mortgage and loan repayment.

When you are working to get rid of debt, you must look at all options available. Knowing when you should refinance could make or break your financial life. Finding extra funds that you can pay off debt and create lower monthly payments at better interest rates is one of the best and easiest ways to get rid of debt.

Week 22 Challenge:

Discuss ALL options with your lender and financial adviser before making a decision.  Consider the added expenses of refinancing and what those fees will do for your total mortgage amount and monthly payments.

We looked into refinancing our home a couple of years ago.  After weighing all the options including our homes current value and how long we planned to stay in the home, refinancing wasn’t a wise option for us.   Knowing when you should refinance is all about doing the research and crunching the numbers.

Knowing-When-You-Should-Refinance-Your-Mortgage

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 21: Evaluate Your Success And Make Changes

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You are reading Week 21 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

This week as we look at your debt relief goals, we are going to stop and evaluate your success and make changes. This is necessary, so you don’t find yourself in a rut and begin getting discouraged. Periodically pulling out your budget and list of debts to make changes is what will keep you successful financially.

Have you been able to stick to your budget? Pull out your spreadsheets for the last few months and evaluate if you have managed to stick to your budget. This is also the time to adjust for things that may have fluctuated. Perhaps utilities were more than expected.  Add in the additional funds needed to your budget, then see what areas you can subtract that from. Ultimately you want to maintain the same amount of savings and debt repayment or more.

If you’re lowered utilities or expenses – that is awesome!  Add those savings to your debt repayment plan.

Are you still in default on accounts? If you are looking at your budget and finding that you are still in significant default on accounts, you may want to go back and reevaluate our posts about when bankruptcy is a good choice and how to avoid bankruptcy. Accounts that are in default for multiple months are much harder to get in check again.  I’m still not suggesting bankruptcy, I’m just suggesting you go back and read those articles again.  I would also suggest getting professional advice if you have yet to take that step.

Have you found increased income?  Have you asked for a raise, taken on a second job or downsized? If your budget is still not providing for debt repayment, it may be time to look at these options again. Continue working on increasing your income and lowering your expenses throughout your journey to getting rid of debt.

What areas need improvement? This is when you have to just get brutally honest with yourself. Look at your spending habits. Have they changed? Check the expenses in your budget and see which ones could be lowered even further. Can you menu plan or lower your grocery budget even more? Maybe it is finally time to step toward dropping your satellite, cable or entertainment budget? Check for areas that still need improvement.

At this point in your journey, it is time to truly evaluate your success and make changes. If getting rid of debt is your goal, it is time to get serious and make some big changes to see this happen. Work smarter and harder to see your financial goals met.

Give yourself a pat on the back!   If you’ve been following along with the series and have been working to make changes, no matter how big or small, stop and give yourself a pat on the back.

Congratulate yourself on sticking with your goal to eliminate debt.  You’ve earned it!

Week 21 Challenge:

Pull out your budget and adjust as needed for current debt, expenses and savings goals.  Make a note of how much debt you have reduced in just a few months.  Stop and acknowledge your accomplishments.  It’s not all about how much further you have to go.  It’s also important to celebrate how far you have come.

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Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 20: Get Started Using The Envelope Method for Debt Relief

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You are reading Week 20 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

If you have looked for any information in the past regarding getting out of debt,  Dave Ramsey is a familiar name.  One of the most popular methods he presents is using the envelope method to help stay on budget each month. This method is a great way to stop overspending. We are going to look at our version of the envelope method this week and hopefully inspire you to use it as well for future months budgeting. While the concept came from Mr. Ramsey,  you should adapt it to suit your needs.

Using The Envelope Method:

The envelope method is recommended because it offers you a chance to see money as it disappears to pay bills. Once the set amount of money has been spent, you have no more to spend. Simple as that.

The envelope system is a great visual and budgeting tool.

However, I am much more comfortable continuing to have my pay check direct deposited into my bank account, and scheduling bills to be paid directly from there. For things like your utilities, mortgage, insurance and vehicle payments continue to pay directly from your bank account. I recommend setting up bill pay with your bank so the check is sent directly from them.  There is no fee and you know it will arrive on time every time.  This step will help eliminate hidden fees as we discussed a couple of weeks ago.

Withdraw cash for groceries, gas and incidentals. At this point, stop by your bank and withdraw the monthly amount budgeted for groceries, gas and incidentals. These are some of the areas we tend to overspend quickly. This money should be there to cover everything from your grocery and household needs, to incidental splurges, lunches out, kids needs and gas.

Once the money has been spent, you have no more to spend until next month or the next payday. This gives you a visual and physical method of understanding how and when you are spending your money. You can put cash money into envelopes designated for each of these areas of purchase, or keep it together knowing it has to work for all of those.

Personally, I separate the amounts out into envelopes.   It’s easier for me to track my spending this way.  I have a separate envelope for each of my “extra” categories.  If you looked at my envelopes you would see groceries, eating out, entertainment, Dana allowance, Derrick allowance, kids needs, house, and gifts.

When money is gone create a spending freeze. This is where the real savings begins. When you set your budget and can’t stick to it, do you typically just pull more money out of the bank to pay for things? Or perhaps you have been using credit cards to make up the difference? When you use the envelope method, the idea is to stop spending when money is gone. On top of that, you hope at the end of the month you’ll have leftover money in your envelope to put back into savings.

When you are out of money – you have to stop spending. No more groceries. No more gas. No more special lunches out, etc.

Another approach is to “roll” the cash from one month the next.  This is helpful if you have a special event coming up.  Maybe you and your spouse want a special dinner out that will cost more than your typical months budget.  Save money prior to the event, so you can splurge debt free.

Every few months I would take out my leftover money and make a deposit into my savings account or into checking to pay off more deft.

If you find yourself going over the amount of cash you have each month.  It’s time to reevaluate your budget and spending habits.

What you need:

The frugal method is to use standard letter sized #10 envelopes.  You can simply write the category on your envelope or tape a spending record on each. I used this printable envelope label when I first started with the cash system.  Recording my expenses forced me to keep track of where my money was going and allowed me to make adjustments based on my spending habits.

You will also need something to keep your envelopes together. Your cash envelopes will become your new wallet so to speak.  I found this one as an example, but you can usually find them in the $1 Spot at Target.

If you prefer to get fancy, purchase Dave Ramsey’s Deluxe Executive Envelope System or a this pretty version of the envelope system.

Using the envelope method is a highly popular way to help you focus on where and how you are spending money. As a result, you often find yourself having a much easier time paying off debt. As you see your money physically leaving your possession you will be less likely to use it.  Trust me – it worked for us!

Week 20 Challenge:

Give the envelope system a try.  Create your envelopes and commit to only spending the amount of cash on hand.

Using The Envelope Method

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 19: Get Serious About Your Household Budget

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You are reading Week 19 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

We have covered a lot of topics so far this year regarding getting rid of debt, and that included our starting posts that told you how to make a functional budget. This week we are pausing to look back and get serious about your household budget.  It’s time to look at some drastic ways to reduce your expenses, so you can pay more toward your debt or save.

Cut back your grocery budget. You can’t cut out your grocery budget, but you can change it drastically. Coupons are free and easy to use to help lower your budget. Various savings and cash back apps for your smart phone are excellent choices as well toward lowering your grocery costs. Cutting back on meats, alcohol and junk foods are other ways you can lower what you are spending. Using menu plans and even freezer meals can stretch that budget even farther and help you to find wiggle room to apply toward your debt.

There are tons of posts to help you get started already on my site.  I have a series on how to save money at your favorite stores which may help reduce your grocery expenses.  If you’re not interested in coupons, take a look at my frugal living articles to help you live well on less.

Eliminate your entertainment budget. This one hurts, but it is necessary. Switch from the weekly entertainment budget to finding free things to do with your family or spouse. Watch movies at home on your streaming service like Netflix or Amazon Prime.

Play board games, or watch a prime time TV show together. Go for walks, visit free art galleries or take in local free musical performances. Halt eating out in favor of making meals together. Eliminate this extra item in your budget and easily free up $100-$200 a month.

If you live in Hampton Roads, I share a weekly round-up of free weekend activities. You can also search for a blog with local events in your area to stay busy for less.

Lower your utility costs. We are spoiled. Yes, that is brutal and may not apply to everyone, but reality is we have become accustomed to the comforts of cool houses and hundreds of TV channels.

Things like changing the temperature on your thermostat, using ceiling fans and avoiding use of the oven in the summer can keep your home cooler.

Throw on extra layers, use wood heat and invest in proper insulation of your windows and doors in the winter. These simple tricks can be the difference between saving or spending hundreds of dollars each year.

It is time to get serious about your household budget, and focus on really seeing your expenses and spending habits for what they are. When you are struggling to pay the minimum balances you sometimes have to adjust your life to reflect the need for more income. To get rid of debt you must make sacrifices. This doesn’t require a diet of beans and rice, but does mean you will need to focus on what is important versus what feels good and is convenient.

Week 19 Challenge:

What expenses can you cut or reduce to lower your monthly expenses?  Jot down ideas on ways to seriously cut the extra expenses from your budget.  Add up the amount and post it somewhere you will see it daily.  Every time you want to lower the thermostat this summer, think about how much additional money you are paying toward your debt and how good it will feel to finally be debt free.

Get-Serious-About-Your-Household-Budget

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 18: How to Find & Eliminate Hidden Fees

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You are reading Week 18 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

Did you know that you may have incurred undue debt just because you aren’t paying attention to hidden fees in your accounts? This week we are going to show you how to eliminate hidden fee debts. Even the most careful financial person will miss out on hidden fees that can accumulate on your balances quickly.

Tips to Eliminate Hidden Fees:

Check for monthly account maintenance charges. Everything from your bank account to a secured credit card may be charging you a monthly fee just to maintain your account. While it is common for these fees to be applied, there are many instances where you can switch to a different account or ask for a fee to be waived if your account is in good standing. Shop around for a bank or creditor that doesn’t charge you a monthly maintenance fee.

Personally, I would NEVER pay a fee just to have a checking or savings account at a bank.  Don’t pay extra to let the bank hold your money!

There are also countless credit cards that don’t have an annual fee.  If you’ve previously signed up for a card that waived their fee for the first year, do you know when that fee will be charged?  It might be time to call and make a change to your account.

Find out what falls under “surcharges” on your accounts. At the bottom of many utility, credit card and banking bills you will find items listed as “surcharges”. It is your right to know exactly what is included in those charges. Ask for a breakdown, and dispute items you don’t feel apply to you. While you won’t always be able to have charges removed, you may find that you can. It is one more hidden fee debt that you can rid yourself of.

Go over insurance policies to see what they actually cover. Insurance is a sticky thing to research. Going over insurance policies may be boring, but it can make the difference between paying for something you want and need, and paying for things you will never use.

Check over your auto policy, home owners, renters, travelers, life, dental and vision insurance to make sure you are paying for something that is worth your money. Insurance is a necessary part of life, but sometimes policies vary so widely you will need more information to know you aren’t paying fees for things that won’t apply to you.

Now, I’m not suggesting dropping coverage just to save a few bucks.  The point is ensure you’re not being charged for fees or extra’s that don’t apply to you.

A few insurance policy “hidden” fees:

  • Administrative fee to break up your 6-month premium payments into monthly installments.
  • Fee added for automatic bill pay or pay-by-phone.
  • Extra fee for roadside assistance (which you don’t need if you have AAA.)

ATM fees.  While not hidden, you may be incurring fees each month for using ATM’s that aren’t part of your banks network.  If you go to the ATM twice per week and get hit with a $2 fee for each transaction, you are wasting $16 per month!

As with every step you take toward getting rid of debt, the little things shouldn’t be overlooked. Literally every single dime you can save is one step closer to being free from debt.

Week 18 Challenge:

Pull out all your bank statements, credit card bills, utility bills and insurance policies.  Are you being charged fees that can be eliminated?  Mark up your statements and hit the phone.  Some fees you might have to accept as part of your policy, but others maybe negotiable.

How-to-Find-and-Eliminate-Hidden-Fees

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

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Week 17: Why Do You Need a Savings Account?

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You are reading Week 17 of 52 Weeks to Eliminate Debt & Curb Spending.  Please read the overview here to learn more about the series & get your FREE financial planner.  If you just joined us, please start with week 1.

There are a lot of expenses that we will tell you are not necessary in your budget, but Savings Accounts Are Not Optional.  A savings account should be considered a mandatory expense.  We are going to share with you some of the reasons why, and ways you can make that happen. Creating and sticking to a savings plan can be a tough thing for many on a tight budget, but the reality is even the smallest amount of savings can help when times get tough.

Why do you need a savings account?

They prevent debt from occurring. Hands down a savings account is one of the most important things in our financial life that will prevent debt from occurring in the first place. Even if you are already in debt, setting aside money for a savings will help to prevent further debt.

For many people, debt occurs when they are forced to use credit to pay for something either in an emergency or due to loss of income. A savings account is one of the best ways to prevent that from being an issue. As you work to get rid of debt, putting off savings isn’t wise. Even though you are trying to devote as much money as possible to paying your debt, you also need to save money in case something happens during that process. You do not want to incur more debt because you haven’t been saving properly.

Something will ALWAYS happen.  It may be your tire blows and needs to replaced.  It may mean your child needs new glasses or your copay for a recent doctors appointment is higher than anticipated.  Whatever the cause, large or small, having money set aside will help prevent further debt.

They are an investment that can earn passive income. Banks offer different incentives and earning potential on savings accounts.  Check around to find the best interest earning account option to meet you needs and start putting aside even just a few dollars a week toward savings.

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Week 16: Understanding How Your Spending Habits Affect Your Debt

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You are reading Week 16 of 52 Weeks to Eliminate Debt & Curb Spending.  Please read the overview here to learn more about the series & get your FREE financial planner.  If you just joined us, please start with week 1.

This week in our journey to get rid of debt, we want to look at understanding how your spending habits affect your debt. For even the savviest person, debt can creep up quickly and unexpectedly. While it isn’t always the case, your spending habits can be the reason you have found yourself in debt.

Do you feel the pressure to keep up with others? Whether it is going out to lunch with the rest of the work crew, or buying the latest video game system for your kids for Christmas – peer pressure can hurt you. Many people simply find it difficult to live within their means and not spend when they want to keep up with their peers.

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52 Weeks to Eliminate Debt & Curb Spending

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Are you ready to get your budget under control?   Do you long to live a life without debt?  Then get ready for our new series: 52 Weeks to Eliminate Debt and Curb Spending!

Each week we will discuss practical ways to help you get out of debt and take back control of your finances.   Now, this isn’t an easy challenge but it’s one that you must commit to in order to help secure your financial future.

Some of you may be thinking it’s not possible to be debt free.  Maybe you’re living paycheck to paycheck and are just barely making your minimum payments each month.  Regardless of your financial situation, you can still get out of debt.

For some people (depending on the amount of debt) it may take just a few months, but for others a few years.  However long the road to a debt free life, it will be worth it in the end.  Just stick to the plan.

My family is finally living debt free.  Our goal was always to be debt free except for our mortgage.  Once we wrote that last check, it was liberating.  I felt like a weight had been lifted from my shoulders, and I want all of you to feel the joy of not owing your hard-earned money to someone else.

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Are your ready to eliminate your debt?  Get started with Day 1!

Week 1: Establishing Debt Relief Goals
Week 2: Make a Functional Family Budget
Week 3: Making a Debt Repayment Plan
Week 4: What Debt Should We Pay Off First?
Week 5: Finding Income When you Have None
Week 6: Change the way you view money
Week 7: 3 Ideas to Make the Step to Downsize
Week 8: Making Wise Budget Choices
Week 9: 8 Ideas for Finding Alternative Sources of Income NOW
Week 10: Is Bankruptcy Ever a Good Choice?
Week 11: How to Avoid Bankruptcy
Week 12: How to Negotiate with Creditors
Week 13: Get Rid of Money Zappers
Week 14: Green Living for Debt Relief
Week 15: Focus on Student Loan Debt
Week 16: Understanding How Your Spending Habits Affect Your Debt
Week 17: Why Do You Need a Savings Account?
Week 18: How to Find & Eliminate Hidden Fees
Week 19: Get Serious About Your Household Budget
Week 20: Get Started Using The Envelope Method for Debt Relief
Week 21: Evaluate Your Success And Make Changes
Week 22: Knowing When You Should Refinance Your Mortgage
Week 23: 7 Ways To Save Money On Groceries & Household Expenses
Week 24: Credit Card Settlement Facts – You Need to Know
Week 25: Are You Planning for Your Retirement?
Week 26:
Week 27:
Week 28:

Don’t miss a week of the series.  Get each weeks post straight to your inbox and get a FREE Financial Planner!  The planner includes:

  • Savings Goal Worksheet
  • Debt Payment Checklist
  • Debt Repayment Plan
  • Bill Pay Calendar
  • Monthly Budget Worksheet
  • Cash Envelope Template

Sign up below or click HERE to get your FREE financial planner.

I’ve also created a Pinterest board that you can follow along as I pin each weeks post plus more ways to keep your budget on track and curb your spending.

Now let’s get started!

Disclosure:  I am not a financial adviser nor do I have formal financial training.  All articles are for informational purposes only and should not be interpreted as financial advice or consultation.  Please consult your account and/or financial adviser before making changes to your finances.  All situations are different, so please consult a professional to determine your individual needs.

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Week 15: Focus On Student Loan Debt

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You are reading Week 15 of 52 Weeks to Eliminate Debt & Curb Spending.  Please read the overview here to learn more about the series & get your FREE financial planner.  If you just joined us, please start with week 1.

When you are working on debt, one of the biggest problems many individuals face are their student loans. This week in our debt relief project we are going to focus on student loan debt. Sadly for most young adults to get higher education, loans are a necessity. Education is very important, but debt as a result is frustrating. This week we will talk about some tips to help you handle student loan debt.

Why You Should Focus On Student Loan Debt:

Get caught up on past due payments. If you are already behind on payments, this should be your first focus. Get caught up as quickly as possible. Interest, penalties and fees add up fast with student loans and can be tough to overcome.  When in default, a student load debt may become due in a single payment called acceleration. Unlike other debts, student loans are often immediately sent to collections when in acceleration. This can result in tax refund garnishment or even wage garnishment in a short period of time.

Ask for forbearance. One thing that is wonderful about student loans, is the fact that you can ask to have your payments suspended when you are in financial strain. You will still be responsible for paying the interest and fees each month, but the overall principal payment will be on hold for 1-2 years.

Ask for lower income payment plan. If you can still manage a payment, just not as high a payment as is required, it is time to ask for a lower income payment plan. You may have to provide proof of income to receive a lower payment, but it can be well worth it to maintain your account in good standing.

Should I pay off my student loan or credit card debt first?

Once you are current on your debts and assuming you have the extra money in your budget to put toward paying off debt, you should focus on paying off credit card debt first.  The #1 reason is mentioned above – forbearance.  Credit card companies don’t offer suspended payments.  If you ever need to suspend payments, you have the option with student loans.

Second, student loan interest is a tax deduction.  If you must pay interest, at least get a bit of a tax break while your chugging along to becoming debt free.

However, you should consider what type of student loan you have. Federal student loans usually have a relatively low instead rate compared to private loans which could have a much higher APR.

As you work toward finding debt relief, you really should focus on student loan debt early in your journey. Student loans can quickly get out of control. It’s important to get this debt under control as quickly as possible.

Focus On Student Loan Debt

Disclosure:  I am not a financial adviser nor do I have formal financial training.  All articles are for informational purposes only and should not be interpreted as financial advice or consultation.  Please consult your account and/or financial adviser before making changes to your finances.  All situations are different, so please consult a professional to determine your individual needs.

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