Debt freedom is a combination of so many sacrifices, commitments and activities. But above all of them rises one ingredient that will solidify the whole endeavor: saving.
Your savings will encompass all your efforts to get rid of debt once and for all. It prevents you from getting yourself further in debt in case of an emergency situation. It can also keep you from missing out on a debt payment in case your income is suddenly compromised. You can expect that your family will be taken cared of when you have an adequate amount of savings on your bank account. These are only a few of the advantages of saving.
However, you may be wondering: how can you afford both your savings and your payments?
That is relatively easy: you use a debt relief program that will allow you to make smaller monthly payments than your current. One of the programs that you can use is debt consolidation. While the other options will also satisfy the lower payment requirement, this will allow you to take care of your credit score too. Since the lower payment is allowed, you get to use the freed funds from your budget and put that into your savings. Not only that, consolidating your debts will simplify debt payments. Since you don’t have to exert much effort into monitoring and tracking your payments, you get to concentrate on growing your income instead. That will help increase your extra money that you can also put into your savings.
Admittedly, saving is not the easiest thing to get used to. There is always the temptation to use it for something other than an emergency. Here are some tips that can help you pursue savings and keep yourself from straying.
First of all, get it from your income immediately. You can set up an auto deposit if you want. Treat it like you would your taxes – shave it off and don’t touch it unless you really have to. The idea is if you don’t consider it a part of your net income, you won’t really miss it.
You can also make saving fun. Turn it into a competition within the family – or even just between you and your spouse. Whoever gets to save the most will win a prize or will be treated by the loser. Or you can perform a service to the winner. Try not to put up an expensive prize as that defeats the purpose of saving. You can also make it a contest between friends to encourage the whole gang to save.
You can also set up a savings meter for the family. Create a long and clear tube then put markers with the appropriate reward. Place it somewhere visible in the house. Everyone can put in money into it – even the kids. When you reach a certain level, the whole family can enjoy the rewards that you have appointed.
Be creative in your savings and you will find it to be very rewarding in the long run. The elimination of the stress and worry for any unforeseen emergency should be a reward in itself already.