Statistics show 25% of Americans have less than $1,000 saved. Another survey showed 51% of Americans have less than three months of savings.
Many financial representatives have made recommendations on how you can get out of debt. But have any of those tips worked for you?
Some of the tips may cover the top seven or 10 tips to help you get out of debt. These tips glance over different ways you can eliminate your debt but few really give you the tools you need.
There isn’t one formula to help you get out of debt since each way is different. Then some of these tips don’t tell you what you need to do.
In general, you have to take responsibility for your debt and make a plan to eliminate it completely.
If you want to avoid these statistics, there are several things you can do to become debt-free.
To be in the debt-free category is great. If you’re not debt-free, you could be one step away from disaster and owe someone a lot of money.
Several things in life can cost you up to $1,000 or more. If you don’t have $1,000 in your savings, you could be struggling.
You could easily have an emergency to service your car which can cost you. Repairs can range from $50 all the way up to hundreds or even thousands of dollars.
Then you may have a medical or dental emergency. Your insurance, if you have any, may or may not cover the entire bill.
You might have to take an airplane flight to visit a family member. Last-minute flights are not cheap and cost you double the price you would normally pay.
In other instances, a family member may contact you and need money. Naturally, they’ll say it’s an emergency.
There are others but these are some ideas that I have experienced over the years.
“A lot of my experiences left me in situations on what do I need to do?”
Fortunately, I had an emergency fund to help cover the expenses, but I never liked the price tag on some of these expenses.
You can not plan for an emergency when they happen. Sometimes these emergencies happen all at once or the emergencies come back to back.
Some of these tips can help you and also allow you to start building your emergency fund. It’s better to start changing your habits today to prepare for these unexpected events.
1. Start saving a little at a time. If you put away $25 one month, you should work toward increasing this amount in future months if possible. You should aim for at least $1,000 if you follow the Dave Ramsey method. Once you have that $1,000, you may want to increase your emergency fund depending on your life, family responsibilities, and other possible expenses.
2. Practice delayed gratification. With all the commercials and ads popping up, it’s too easy to buy things now rather than wait. You may want to save for big ticket purchases so you’re not adding a high ticket item to your credit card bill.
3. Save your next bonus or raise. When you get a bonus or raise, just save the money. Act like you never received the money and just put it away into your savings.
Continue to live off the money you were receiving before your pay raise. The extra money can help build up your savings.
4. Find a part-time job and start building up your savings. If you are barely making it and your income covers all of your expenses, you may have to increase the income. Coming into your pocket.
You may have to work another job to help add more income to build up your savings.
If sports stars can make millions of dollars, they still find time to work in sponsorship deals to add more income.
5. Start selling items you no longer use. You can have a garage sale or sell items online. With sites online, you can sell items on eBay, Amazon, Craigslist, Poshmark, Facebook marketplace, Etsy, Gazelle, and other websites.
6. Drive people around on Uber or Lyft during your free time.
7. Make deliveries in your spare time with Uber Eats, Amazon, DoorDash, and Postmates.
8. Find seasonal work since many companies hire workers during peak seasons such as the Christmas holidays and summer.
9. Create a budget. This is not a money-making tip, but it is a recommendation to help you figure out where your money is going every month. For more details on a budget, you should see this article.
10. This last tip is probably one of the most crucial ones that many people should have whether they are rich or poor. Even a millionaire can overspend if they’re not careful or their investments drop. The millionaire can soon become a thousandaire before they realize it.
If you have set up your emergency fund and reduced your debt, you may want to look at real estate investing. Adding another stream of income can offer you more money as well as help you with your tax bill.
Once you have created your emergency fund, start to look at other creative ways to add more income. As you witnessed during the pandemic, one stream of income did not work for everyone.
Having multiple streams of income seems to be the solution. If you get laid off from your job, you need either a large emergency fund or another source of income until you get your financial life in order.
The pandemic put many people in a tough situation in 2020.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.