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Start the Year Right with These 5 Tips to Pay Down Debt

Start the Year Right with These 5 Tips to Pay Down DebtThere is nothing magical about starting a new year. The marking of the passage of time is simply a human creation, with the calendar nothing more than a way to stay organized with our fellow humans.

If you are planning to do something new, you don’t have to wait until the calendar technically ticks over to a new year in order to make it happen – you can start anytime.

With that said, many people still hold to the tradition of making resolutions each January. If you are in that camp, some of those resolutions may relate to your finances.

Indeed, countless people resolve themselves to make significant financial changes when the new year rolls around. Should you find yourself in need of paying down debt in the coming year, consider using the following tips.

1. Clean House and Save

As long as we are making resolutions, why not combine a couple of them? To pay down your debts slightly, consider selling off old items that you no longer want or need.

This idea will serve the dual purpose of cleaning out your house and also working on your debts. You might not make a lot of money this way, but apply whatever money you do make directly to the debts you would like to eliminate.

2. Pick Up Part-Time Work

This is a popular plan when debt is getting in the way of a financially comfortable lifestyle. After the holidays, you may feel that you finally have a little more time on your hands. If that is the case, look around for a part-time job that can help you make some extra money.

Even if you only work a few extra hours per week, that money will add up in a hurry month after month while working on your debts.

3. Eliminate a Bill

When the calendar turns over to January, take a good look at your monthly expenses and pick out one bill that you are going to get rid of in the new year. This may be a gym membership you never use, or a subscription to a service that is not necessary.

When you eliminate this bill, take that money and add it immediately to your debt payments. Just like that, you will have taken money that was previously being wasted and applied it to an important goal.

4. Skip One Meal Out

Of course, a common resolution for the new year is to lose weight. If you are both trying to lose weight and pay down debt, it might be wise to skip one meal out per month. Even just one meal per month could save you $50 or more, which is a nice sum to be able to add to your debt payments.

5. Review Your Overall Budget

It is easy to just go from month to month with the same budget, but it is worthwhile to review that budget once per year. The start of the year is as good of a time as any to do just that. Take a look at your budget as a whole to see if you can find any line items which can be reduced in favor of making extra debt payments.

 

Did you make any resolutions this year? How are you going to stick to them?

 

Photo courtesy of: Tessa Rampersad

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John Schmoll is a Dad, husband and veteran of the financial services industry. He's passionate about helping people learn from his mistakes so that they can live lives free from the shackles of debt and empowered to make their money work for them. You can check out his other sites: Frugal Rules, for ways to improve your financial literacy; and Sprout Wealth for tips on different ways to make more money. John has been featured on Forbes, Lifehacker, Yahoo Finance and US News & World Report and more. If you're wanting to grow your blog, check out my blog coaching services to see how I can help you take your site to the next level.

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