How To Save Money When You Are In Debt

Everybody wants a piece of your paycheck. I mean, doesn’t it seem like as soon as you get paid, the money is gone before you can blink an eye? Car payment(s), rent or mortgage, insurances, phone bills, utility bills, credit card payments, and the list goes on and on.

After you make all these payments, what are you left with? This way is very difficult (if not impossible) to pay off your debts. Now, let’s be clear, the real reason is you are not planning, or at least, you are not planning properly. Therefore you are not saving.

“Hold it!” you say, “how could I possibly save if I’m not making enough money??”. I hear you, don’t worry. I’ve been there, so I know how it feels.

There is a way: Treat savings just like a bill. Pay yourself first, no matter what happens.

Open a savings account, even if you have one. This is no ordinary account; this is an account you will deposit to, but never withdraw from. You will hold money that you are not going to use in the near future. Commit to an amount you can safely set aside each paycheck, say $100. As you get paid (let’s assume you get paid every two weeks), the very first check you write is to yourself, for your specified amount, and you deposit it to your savings account that same day you get paid. Then you pay all your other bills. You absolutely have to commit to follow this plan, no matter what happens. You have to pay yourself first, always. If you don’t, you are only working for everybody else but yourself.

I started doing this when I was deep in debt, and I was religiously paying myself first, every single time. After a few months, my financial outlook changed completely!. For the first time in my life, I had money in the bank. The enthusiasm you create in your life is beyond description. Let me ask you, how would you feel if you had, right now, an extra $5,000 in the bank? Well, imagine that you DO have them in the bank. Imagine how you feel having that money, and make it a priority.

Stop or cut down on unnecessary expenses, like eating out or buying things you don’t really need right now. Save that extra money and put it into your new account. You will feel a lot better about your debt once you have a strong savings account in the bank. And the, once you have a nice amount of money, you can invest it to make more money, or pay off your debts or some of them, or just keep saving.

Please visit our site for free information, tips and resources on how to get out of debt Remember, you need to plan, and to stick to your plan. Make it an absolute priority to pay yourself first!

You can also download a budget spreadsheet from our site to help you organize your expenses and map a plan of action to get out of debt.