Opinions, reviews, analyses & recommendations are the author’s alone and have not been reviewed, endorsed or approved by any of these entities.
Are you new to the START SAVING Challenge? Learn about it HERE & sign-up.
This post is part of the START SAVING Challenge. Make sure to read previous posts.
Day#8: Reduce Your Expenses
START SAVING Challenge: Day #9
Today's easy saving task (this might take more than 1 day – that's ok)!:
Change your debt situation by lowering how much you pay in interest.
What does your debt situation look like? Maybe it's student loans (I hope you read yesterday's challenge), is it only credit cards, is it medical bills – or maybe it's all three. What makes up your debt situation? How much do you pay in interest, how much do you owe, who do you owe, what's the term? If you have debt, you SHOULD know these things. Unless you know your debt story, your debt situation can't get better. So today, I am going to help you change your debt situation by having you write out your debt story & help you lower the amount of interest you pay. Sit back, read the challenge, and tackle it the best way you can! Here we go!
STEP #1: Write down your debt story.
It is possible to pay off your debt faster by making smaller payments. Yes – it's true. I have personally done it and it's one of the main reasons I was able to pay off $11,000 in credit card debt in 1 1/2 years. But before we tackle how to change your debt situation, we have to know what makes up your debt story. So the first thing I want you to do is use the FREE Debt List PDF to write out your debt story. Be completely honest with yourself. A $150 credit card balance is still a part of your debt story, so make sure to write it down.
Download your FREE Debt List HERE
STEP #2: Pay less toward your debt by lowering your interest rates.
This step is a bit lengthy and full of detail. It's so important that you read the entire challenge, as I give you some pretty powerful ways on how to complete this. Before we get into how to lower your interest payments, I want to make something very clear. I would never recommend a client to consolidate debt if the internal and underlying problems causing the debt is still there. My point here is that you accumulate debt for a variety of reasons. Maybe it's bad spending habits, not being aware of your financial circumstance, not being able to properly handle money – whatever the underlying cause as to why you accumulated debt needs to be addressed before you consider consolidating debt.
The reason I say this is because if your financial mindset is not changed, then your spending behavior won't change either. You will consolidate your debt with a lower interest rate, with lower payments, and you will allow yourself to believe you can spend more because your payments aren't as high and your saving on interest. THIS IS A BIG NO-NO! So before you move on, make sure you are aware of the underlying cause of the debt by going back to Day #4, #6, and even Day #7. That's my rant – but it's important for you to know this before moving on.
Let's talk about why it's so important to lower your interest rate payment. Let me give you an example. Let's say you have a credit card that has a balance of $5,000. The minimum payment is $100 (2% of the balance). You have an interest rate of 18%. Not only will it take you 472 months to pay it off, but you will also pay $13,400 in just interest during that time! That's insane! Not only is that far more than your actual balance, but it will take you FOREVER to pay it off.
So let's say you lowered your interest rate to 10%. The same $5,000 balance, with a minimum payment of $100 (2% of the balance), will now only take you 227 months and you only end up paying $3,260 in interest during that time. By simply reducing your interest rate from 18% to 10% you were able save over $10,000 in interest! Do you see why it's important? If you lower your interest payments, you could make a lower monthly payment, yet still pay off your debt more quickly.
So how do you lower your interest rate?
- Try giving your credit card company a call. Remember your negotiating skills from yesterday's challenge? You will need them today as well. Keep in mind, your credit score will have a huge impact on whether they will work with you. The higher your score the more likely they will negotiate. Don't know your credit score? No problem! Head on over to CreditKarma.com to get an estimate your credit score is FREE. Also, you can see why I love CreditKarma HERE (we will be using another one of these apps later in the challenge as well).
- Look into balance transfers. This is when you move your balance from a high interest credit card to another credit card that has a lower interest rate. This is by far the #1 reason why I was able to pay off my credit card debt. You can read more about balance transfers and my story HERE. Warning: There are certain things you have to be aware of with balance transfers. If you don't want to read my post about balance transfers, here are some things I want you to ask before applying for a balance transfer card or promotion. (Resource: Where to find balance transfer credit cards)
- How long is the 0% introductory period?
- Make sure you are approved for an amount that will cover the debt you want to transfer.
- What will happen if you still have a balance after the introductory rate is over? Will the new rate be on the full balance transfer amount (SO IMPORTANT)?
- How much is the transfer fee (this is usually $5 or 3% of the balance transfer amount). Try to find one that doesn't have a transfer fee – they do exist.
- What is the penalty for being late on a payment?
- What's the fine print
Another Tip: It is possible to consolidate your high interest student loans with Credible. Make sure to reach out to your loan provider if you have FEDERAL student loans. There are other ways to lower your student loans as well. If you didn't read it from yesterday's challenge – make sure to check out my student loan post HERE
DAY #6 RECAP
- Write out your debt story using my FREE Debt List Worksheet.
- Lower how much you pay by using the methods outlined above.
- This is where you will need your accountability tribe the most. Have they started to change their debt situation. Reach out and make sure to help each other out.
- If you change your debt situation, whether it's by consolidating your loans or by using balance transfers, you must always be aware of your credit report. Before applying for anything make sure to ask about hard inquiries. Some companies won't produce a hard inquiry on your credit report when consolidating debt, but it's important that you are aware of it and ALWAYS ask! A hard inquiry only usually brings your score down a couple of points, but the decision is up to you.
- Always try to tackle the higher interest rate debt first.
Don't forget to reach out to other TBM Family members for help, guidance, and motivation. Don't be afraid to ask questions about this challenge. How are other members dealing with it! How are you changing you debt situation? Let me know by sharing your comments with me below VS emailing me! Now – go get some cookies, a huge glass of milk and a fuzzy blanket, you deserve it! I am proud of you!
Make sure to share your savings progress with friends. Use the sharing buttons to spread the wealth.[tweetthis twitter_handles=”@thebudgetmom”]Today I am changing my debt situation! Day 9 #StartSavingChallenge[/tweetthis]
Not a member of the TBM Family – Join HERE
FIND ME HERE:
FORUM: TBM Family
If you have been part of my previous Savings Challenges, we shook things up for 2020. Let’s resolve to have 2020 vision when it comes to seeing how we can become better savers. This year we have 24 savings challenges, two each month. These are designed to be fun. Saving should be fun because you make things easier for yourself. My course will guide you on a year of savings so you will be better off when 2020 comes to a close. Sign up for the Savings Challenge course to kickstart your savings.
Agario unblocked list Online Game Server
3.agario server agarprivateservers.org
5.agario unblocked at school agar.tv
6.agar.io game agariogame.net
7.agar.io online agarioonline.org
8.agario unblocked agariounblocked.org
10.agario unblocked easyagario.icu
2022 agario private server list Online Agario Game.!