How to Save Money and Get Out of Debt

By *01 WriterGig

Ready to get serious about managing your money? Wish you have a healthier savings account? If too much debt is causing you stress and concern, take the steps necessary to turn around your finances. Not only will your bank account look better, you'll sleep better too with the stress of debt out of your life. Here's how to save money and get out of debt.

Step 1 - Tally up your debts, your monthly income and your set expenses (bills that are constant). Estimate your other expenses, such as groceries, gas, clothes and extras. Look back at bank account statements and credit card bills to get a feel for how much you spend in the different

Step 2 - Make a plan. If the word budget scares you, think of it as a plan for how you will allot or spend your hard-earned money. How soon can you save money get out of debt? The sooner you have a plan, the quicker this process will be. Decide now how much you will spend in each category every month. Make sure there is some money earmarked for savings.

Step 3 - Use cash for variable expenses, such as groceries and incidentals. Take the cash out weekly and allot it to envelopes marked with the categories. Spend wisely. Once the cash is gone, it's gone until the next dispersement. No dipping into other envelopes or the bank account.

Step 4 - Save $1,000 in an emergency fund. Pay minimums on your debt while you save your money for emergencies. It's important to have this cushion in the bank so that in the case of an emergency (unexpected car repair or medical expanse) you don't have to turn to credit cards once again.

Step 5 - Cut up your credit cards (but don't close the accounts if you have an outstanding balance or still owe money on them). Stop using them online, too. Use your debit cards for budgeted online expenses.

Step 6 - Have a weekly budget meeting with your spouse or yourself if you're single. Be accountable to each other.

Step 7 - Pay off your smallest debt first, adding anything extra to that debt each month until its gone, while still paying the minimum on your other debts. Once the first debt is paid off, put everything that was going toward it to your next debt. Dave Ramsey calls this the "debt snowball" because as you pay off the smaller debts, you free up more and more money to pay off the larger ones.

Step 8 - Stay motivated. Keep working toward your goals and remind yourself monthly of the progress you've made. Get intense, Get rid of your debt so that you can be free of those interest payments and begin spending your money on the things that matter as you save for your future.

Step 9 - Use manufacturer's coupons, combined with the best grocery store sales, to save money on your food bill. Since a large portion of your disposable income goes to buy food, this is a good area to trim. See resources, below, for a great coupon source website.

Step 10 - Plant some of your vegetables and herbs instead of buying them. Even replacing 1/4 of your summer vegetables with home grown ones will add up to a big savings. Do you live in an apartment or small house? If you have a balcony or deck, you can at least have a decent container garden. Start with tomatoes in large pots. Small savings will help you save money and get out of debt more quickly.