Debt Consolidation Loans

Get to the truth about debt consolidation loans.

How to Save Money for Debt Repayments

When looking at improving your personal finances you should always look to plan ahead. Planning successfully comes from good preparation, being dedicated and having an achievable target.

Set your target

When identifying your target you could follow one of my favorite methods and have a SMART objective. SMART objectives should be:

S – Specific – you should know exactly what you want to achieve and when you want to achieve it
M – Measurable – you should be able to measure whether or not you’re hitting your objective
A – Achievable – Can you definitely achieve the results you’re looking for?
R – Realistic – Are the targets you set for yourself realistic?
T – Time bound – Set yourself a time limit for when you want to achieve your target

An example of a SMART target that you could set yourself could be:

“I wish to have $1000 worth of savings in your savings account in six months time”

Start your plan

When you have decided upon your realistic aim, the next question is, how do you intend to get there? Here I would suggest firstly starting with a sort of brainstorm. Get a sheet of paper and write down your aim in the middle, and then identify all the possible things you could do to help achieve your target. For example, if your aim is to have $1000 worth of savings, note down all the possible ways in which you could look to save money. Here are a few of my money saving favourites:

Budget – Set yourself a budget and identify your monthly income and expenditure. By doing this you can identify how much you intend to realistically save in a certain time frame. Try and set your budget for the year then divide by 12 to give you your monthly budget.
Price Comparison Sites – These are fantastic if you are looking to save money. You can check your monthly outgoing bills using the sites to identify if you are paying too much money, this helps you see how much you could be saving. They can be used to check a number of different essentials, from utilities to mobile phones.
Use a shopping list – When you are out shopping you should try and stick to a shopping list you have prepared before hand, it will help you only buy what you need to, doing this you avoid any unnecessary impulse purchases.
Sell unwanted items – Sell unwanted items from around your home. Everyone has items lying around that they don’t use, selling these items can result in some quick fire cash to help you along your way.
Savings accounts – If you haven’t got a savings account you should open one. If you are UK based like me then a cash ISA is the best way to save, your capital is totally safe and all interest is tax free. If you are US based then the Lifetime Savings Account or LSA may be the perfect option for you. What you put in the account is not tax-deductible, but whatever returns you earn from your LSA are tax-free.

Monitor your progress

Once you have your plan and you have set the ball rolling, my advice here would be to try and stick to your plan as often as possible. While trying to stick to your plan it’s always important to monitor how well you are doing. If you have set a yearly measurable target, check monthly where you are as a percentage of the whole target.

If by doing this you notice you are falling behind slightly, identify why this is. Has something happened that you didn’t expect to happen? Have you forgotten to address something on your plan? Once you have identified why you are not where you want to be, you can then target the problem.

If you realise that you are ahead of your target and therefore ahead of schedule, then that’s great! Keep at it and you will soon be where you want to be.