Establish a Savings by Reducing Debt

Between the hike in gas prices, more student loan debt, and healthcare costs, consumers are making sacrifices that could mean giving up luxuries later in life.  By sacrificing a savings account, many individuals give up the dream of owning a home or having children.  Below you will find some helpful tips to get you started on reducing debt while creating a savings.

Track your buying and spending habits—Paring down on all of the little habits like fast food, restaurants, and daily trips to Starbucks can all greatly increase a saving plan

Consider the necessities—Look at the decision you are making.  Do you really need to upgrade your car again?  Is a huge, expensive wedding worth the debt? (Even if your parents are paying for the wedding, would they be willing to put that money toward a down payment on a house?)

Look at your credit card interest charges—Though interest rates are rising, if you have a good credit history, you should be able negotiate interest rates out of the double digits.

Keep credit cards below the credit limit—Work toward lowering the balance on each credit card with a high balance.  By keeping credit cards at below 50% of the card’s credit limit, you can begin to improve your credit score.

These steps are a great way to start the debt reduction process, however, for serious debt also seek debt counseling where you will receive more advice and tips.  ■