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6 Highly Effective Ways to Reduce Debt and Save Money

The Christmas season is one of the most expensive times of the year. Holiday shopping, parties, and other seasonal spending can quickly deplete your savings and wrack up the credit card bills. Most people are already live with too much debt so adding to their financial woes only increases their financial stresses.

Once January comes, many people focus on paying off their holiday debt, catching up on their bills, and putting money back into their bank accounts. Adopting healthy budgeting habits in the New Year will help you throughout other financially difficult events too, so you can avoid bankruptcy and keep your debt load more manageable on all future endeavours. These highly effective tips can help lower monthly bills and increase your savings:

1. Use Cash More And Cards Less

Those with low debt loads rarely or never use credit cards or loans to buy stuff. They wait till they have the cash saved and then pay with the money they have tucked away. If you do not have the cold hard cash immediately available to buy something, rather than saddle another purchase on your bulging credit cards, save the money first and only buy it when you have the monies to do so.

2. Pay Highest Interest Loans First

Most of the debt people acquire comes with high interest rates or service charges that quickly add extra and unnecessary payments to your bill. These rates rob your accounts of your hard earned dollars by giving them to corporations and financial institutions. Pay off all debts with high rates and fees first so you are not giving these companies more than you should.

3. Set A Weekly Spending Limit

Many people spend more money than they realize every week or month because they are not paying enough attention to what is going in and out of their account. Rather than pulling out the debit card mindlessly, set a weekly and monthly miscellaneous spending allowance to your budget. Keep a log or pay only with the allotted cash you have taken out for your fun money. You would be surprised how much extra and unnecessary spending you are doing that is depleting your finances.

4. Look For Freebies

Almost everything costs money nowadays which only adds to the debt load. Rather than paying moola for every event or place you want to go to, look for the free activities that are available. For example, a bike ride or picnic at your local park can be just as exciting as a dinner at a restaurant patio but far less expensive. Many urban areas have different live events or markets that you can visit for free every year. Free samples and giveaways will also help you save.

5. Brown Bag It

Buying lunch everyday while at work can quickly add up. For example, spending a mere $5.00 daily on a meal will quickly add up to $25.00 a week, $100.00 per month, and $1200.00 a year just on lunch money. Rather than buying your meal during your shift, bring food from home. The savings will quickly add up more than you realize.

6. Reduce, Reuse, Recycle

We live in a disposable world but many items that are discarded can be reused. For example, many food containers can be washed and used again. Rather than spending money on pricey storage holders, reuse what you already have.

Today, more Canadians are drowning in debt and certain seasons add to your financial strain. Developing effective money saving strategies will help you reduce your debt and keep more of your money in your own pocket year round.

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