How to Bag an Extra $5K in 2016
By Krystal Steinmetz
Countless Americans ring in the new year determined to shed those few extra pounds around their midsection. But the new year is also a good time to sit down and take a good, hard look at your finances. Maybe you could add shedding debt to your list of New Year's resolutions?
If reducing your debt load seems overwhelming, just remember how great you would feel if you started 2017 with an extra $5,000 in your bank account.
From our Solutions Center: Help with student loan debt
First, take a look at your total debt. A recent NerdWallet study found that the average American household is shouldering $129,579 in debt – an alarming $15,355 of that on credit cards. That means the average American is forking over more than $6,600 each year in interest, roughly $2,600 of it for credit cards.
Yikes! But reducing the amount of money you're paying in credit card interest is sometimes just a phone call away, according to the New York Post,
"Few people ask a card company for a lower rate of interest," Matt Schulz, a senior analyst with CreditCards.com, told the Post. "However, if you have a pretty good payment record, we've found that most people who ask for it do get a lower rate."
Here are four more easy ways the Post says you can follow to get control of your finances and end 2016 with an extra $5,000 in savings:
- Figure out where you're spending your money. Simply put, you need to compile a list of your expenses. "This sounds simple, but it's crucial: You need to know how much you make and what you spend it on. Then figure out what you can cut down on," Sean McQuay, a card analyst with NerdWallet, told the Post.
- Spend less money. After you've compiled a list of your expenses, figure out where you can cut back so you can sock away some extra money in savings. For example, if you're spending $6 at Starbucks five days a week, you might want to start brewing your coffee at home instead. Cut back on eating out, pack a lunch and take it to work, and consider dropping your cable or downgrading to a cheaper cellphone plan. Check out "25 Ways to Spend Less on Food."
- Make more money. "Freelance work, selling unused property or teaching classes online are some of the ways you can bring in some extra cash for paying down your debt," the Post explains. Paying down your debt means you're forking out less money for interest. (For more ideas, check out "20 Odd Ways to Make Extra Money.")
- Create a realistic budget (and stick to it). Are there things you can reduce or eliminate from your budget? "Ask yourself: Do I really still need my cable subscription now that I'm on Netflix?" McQuay suggests. "Do I still need to have a landline phone? Do I still need that car I hardly drive? There are basic things consumers at any income level can do to increase their wealth." Check out "8 Secrets to Building a Budget You Can Live With."
According to the Post, those are four easy ways you can get a better grip on your finances and sock away up to $5,000 by 2017.
Do you have a lot of credit card debt? Click here for more help.
Get more tips here: "Resolutions 2016: Crush Your Debt in 3 Simple Steps."
Have you made any financial resolutions for 2016? Share your comments below or on our Facebook page.