The new year is often a time when people set goals for making financial changes or lifestyle changes. In 2017, do both! It takes both better lifestyle choices and smarter financial decisions to help reduce debt and increase savings.
Here are things you can do to reduce your debt in 2017:
- Set a household budget.
If your household is operating without a daily budget, then your chances of reducing your debt are considerably lower than a household that does use a budget to track spending and saving goals. The first step toward reducing debt is knowing exactly what is going in and out of your home each month – so sit down and set a budget for 2017.
- Think long-term.
Think long-term about things like groceries – when you head to the store and notice chicken broth or canned tomatoes on sale, don’t buy enough for one week. Buy enough for three months! According to leading financial experts, that’s the magic number for maximizing savings.
Think long term when it comes to repayment options, too. It may be tempting to pay only the minimum payment on your credit card bills or student loans, but that means that interest rates will remain higher and you’ll take longer and spend more to reduce your debt. Thinking long-term by adding extra funds to your minimum payment is one of the quickest ways to reduce your debt in 2017.
- Consider a debt settlement company.
For certain consumers, debt can be a little too overwhelming to manage alone – and at that point, a debt settlement company can step in and work with creditors on your behalf. They will aim for a reduced debt repayment amount and consolidated payments. Debt settlement companies do come with a fee, however, so be sure to choose the right one for your needs and your financial future.
- Get creative with vacations.
Everyone deserves the opportunity to detox and de-stress. In fact, psychological studies have shown that people are more productive employees and make better decisions after returning from vacation. So don’t skip it because funds are low – just choose your destination wisely! Consider camping instead of heading to a costly resort, or try a staycation, where you rent an Airbnb in your own hometown or even stay at home, but dedicate your time to vacation activities. There are plenty of ways to have fun without breaking the bank on a single trip.
- Set a deadline for your debt reduction.
Having a goal to work toward when it comes to debt reduction will give you the strength and resolve that it takes to make smart financial decisions! It’s an uphill battle at first, when interest rates are high and payments are barely making a difference, but over time you will chip away at what you owe and start to see the debt-free light at the end of the tunnel!
Set a deadline based on the household budget that you have created, and your income that’s coming in. Determine when you can expect to have all or most of your debt paid off. The sooner you can pay it off, the better – but be realistic and take into account the household necessities and any extras that you know will come up. Remember, reducing your debt in 2017 comes down to making smarter decisions and having an end goal in mind: debt-free living!
Cain and Daniels 