Four Fast Methods to Get Your Bank Account Back-On-Track
Oh, sweet summertime! While summer is a perfect time to unwind, seek adventure and make memories, it might not be so easy on your budget. You probably did a great job budgeting for your vacation, but what about all those other enjoyable things you did? Concerts, county fairs, a wedding or two, and may be a little too much dining on the patio at your favorite restaurant. As we say “so long” to summer, you may be facing the task of paying for all that seasonal fun. Here are four tactics to help reset your good financial habits.
1. Reevaluate Your Monthly Budget
When was the last time you took a good, hard look at where your money is going each month? An important first step to reducing debt is reevaluating monthly expenses. Pull account statements for the last 30, 60, or even 90 days and group expenses into categories such as: living expenses, entertainment, dining, etc. Then, evaluate your spending with a critical eye to spot wasteful habits and find proactive ways to make changes. The money saved from unnecessary spending can be put toward paying down debt. Seeing the grand total spent on a certain category may be the wakeup call you need to switch up your habits right then and there!
2. Reduce Monthly Expenses
If you know your monthly expenses are too high, don’t stress. Get creative and take action! Even making small changes can make a big impact on your budget. Consider implementing the following strategies:
- Cut Down on Subscription Services - Recent studies indicate many people are unaware of how much money they are really spending on reoccurring service fees. When the costs of gym memberships, video streaming subscriptions, and meal delivery services are combined, you’re likely talking about a sizable dollar amount. Are you truly getting your money’s worth out of them? Ditch what you can do without and always look for more affordable alternatives.
- Brew Your Coffee and Make Your Meals - Did you know spending five dollars a day on coffee will total about $150 a month? That’s $1,800 a year--Yikes! Likewise, going out for lunch or dinner one-two times per week is a pricey habit. While you may need to carve out more time to plan meals in advance or buy groceries in bulk, the savings will be worth the effort. To get started, start small – set a goal to eat lunch out two times a month instead of buying a couple of times a week. Even skipping the on-the-go coffee a few mornings each week is a worthwhile change.
- Spend More Nights at Home - Instead of going out, improvise with what you already have to create your own version of a fun activity. Set up a make-your-own ice cream sundae bar; coordinate an in-home movie marathon; plan a bring a covered dish party with friends. The options are limitless.
3. Apply the Snowball Method to Your Finances
Regardless of how much money you spent this summer, the snowball method of debt reduction is an excellent way to make consistent strides toward paying off debt completely. This method focuses on paying down smaller balances while also paying the minimum requirements on more significant balances. Once the smallest debt is paid, you roll that payment amount into the next lowest balance. Each small victory will go a long way to helping your debts seem more manageable.
Bonus tip: While following the snowball method, challenge yourself to pay more than your minimum balance requirements. By paying more than the monthly minimum on the smaller payments, you will pay down balances faster and likely reduce the amount of interest you will pay over time.
4. Boost Your Income by Landing a Part-time Job
Picking up a second job could give you the supplemental income to pay down debt double-time. This might sound overwhelming, especially if you already have a full-time job, but the good news is there are plenty of employers out there that are consistently hiring and provide the flexibility you need to live your best life.
- Restaurant Industry - A restaurant is an ideal place to look for a second job, typically because restaurants offer a variety of positions for both kitchen and front of the house staff. Oftentimes, restaurant managers are looking for additional servers or cleaning positions, especially during holiday and vacation seasons. One advantage of working in these types of positions is the tips. One night of exceptional tipping can bring in more than a week’s pay at another part-time job.
- Rideshare Programs - A rideshare program, like Lyft or Uber, provides an excellent way to earn a second income because it offers people the freedom to choose their hours. As a certified rideshare driver, you can use your car to drive people to different destinations on your terms. You can “clock in” during your daily commute time to pick up passengers heading to locations near your work location, decide to work the evening shift on weekends, or maybe just make early morning runs to a nearby airport.
- Retail Holiday Season - During the winter holiday season, many retail stores extend their hours and hire additional team members to ensure they have a full staff to carry them through the busy period. Picking up a part-time job at your favorite store could be a great way to make extra money while also earning special discounts on in-store purchases. Just don’t be too tempted by the discounts that you end up not using this extra income to pay down your debt!
These are all helpful methods for fast debt-reduction, but remember debt doesn’t disappear overnight! If your debt from the summer is higher than expected and you are concerned about paying it down, there is no doubt that with the right plan in place you can make great progress to get back on track and feel in control of your finances again.
Learn more: For tips on how to get ahead of your daily finances, read how to stop living paycheck to paycheck.