Paying debts does not allow you to save!
There is no statement more false than the previous one, paying debts and saving is possible, the only thing that is required is a good action plan, knowing everything you owe well and taking into account your liquidity. In this article we will help you combine both payment and savings , and with that we guarantee that you will be able to achieve your financial freedom and, above all, you will have the ability to improve your credit history.
6 tips to pay debts and save at the same time
1. Start by stopping your acquisition of debts and expenses
The first step without a doubt is not to acquire more debts (unless you are looking to consolidate and pay them through a loan ). Immediately check the ant expenses and the remaining expenses that are preventing you from having more capital, especially check your daily dispensable purchases , that is, visits to the corner store or leisure purchases; Eliminating these expenses you will see an immediate increase in your monthly liquidity.
2. Analyze your monthly income now
All the points on this list are extremely important, but analyzing your income (monthly total) is imperative to succeed with your payment and savings strategy . This number will be the basis of everything, because taking into account how much income you have per month you can define what to spend it on, how to spend it and how much you will have available for your savings. The secret in this first stage is to add each weight you receive , one by one.
3. Convert the previous sum into net capital
Now, subtract your monthly expenses. That is, deduct from the gross total the money you use in your payments of debts, goods (rent, food, bills, etc.) and services (water, electricity, gas, etc.), after performing this subtraction you will have a net number From which you can take a percentage for your savings . It is very important that you allocate a fixed amount to your monthly savings, you can start with $ 500 or $ 1,000 dollars depending on how much you have available.
But what happens if you do this subtraction and stay in red numbers? It doesn’t matter if that’s the case, that’s what points 3 and 2 are for.
4. Decide a periodicity for your savings
This point does not refer to a term per-se, rather when you will have the ability to save. If doing the previous subtraction you are in red numbers, the best thing you can do is define a monthly NO savings, perhaps quarterly is a better option for you and at the next point we will tell you specifically how you can get some extra money to save.
5. Pay your debts from the highest to the lowest
Prioritizing debts is imperative, ask yourself the following questions: What is the debt that generates more interest? What is the debt with the lowest minimum payment? Which is the easiest or most accessible to pay?
Pay first the debts that are generating more interest for you so that you can annihilate them faster, leave those with less interest until the last one, these minor debts are just the ones that will help you generate savings later. Simply put, eliminate high interest as soon as possible, and save with lower interest debts . You can also reunite debts in kubo.financiero to have more control and obtain better payment terms, either with less interest or pay less each month to have liquidity.
6. Create your emergency savings
It is important that this savings that you can generate is emergent, that is, keep in mind that it is not available savings for leisure expenses , at this time that you are having an amount to save (however small or large it is), it is very important that Keep it and make it grow. It would even be highly recommended that, once having a good amount saved, you can enter it into an investment so that it grows progressively. Do you want to know more about investments?