When you are married you may have two incomes coming in. However, this may also mean you have the debt of two individuals now tied together as well. So whether you’re newly married or you’re just looking at chipping away debt, just because you’re currently broke and married doesn’t mean you need to remain broke.
Here are a few tips and suggestions for chipping away at the debt you owe, no matter how much money you’re making.
Dive Into Your Finances
One of the biggest issues people have with getting out of debt is they don’t realize how much they are spending. You need to budget all of this out. So first, determine how much money you are bringing in every month. Now, write out all of your bills. This will give you a clear picture of how much money you are spending on bills and what kind of cash you have available for paying these bills down. Once you know these specifics you’ll be able to begin formulating a plan.
Slash Everything You Don’t Need
It’s far easier to slash $100 out of your budget than to make $100 more a month. This means the best way to save money and start paying off debt is to cut out expenses. You’ve gone through all of your current debt. You need to now cut everything that’s not necessary. You don’t need the cable packages or the sports packages. You don’t need all the audio subscription services or the box subscriptions. While you likely need the Internet you may not need the current speed you’re paying for. Cut out everything you can. When you start chipping away different subscription services you may be surprised as to just how much money you can save without making any other financial adjustments.
You should also cut out any unnecessary spending. Instead of going out to dinner a few days a week eat at home. Don’t buy coffee on the way to work, make it at home. These are small adjustments that will add up big. You may even want to consider changing your auto insurance or even selling off your vehicle and taking something that is slightly older, so you have a few extra dollars to pay off the debt.
Pay Off Debt Before Putting Into Savings
While you want to begin building up a saving’s account, it can sometimes be best to pay off debt first. This is because there is a far higher interest rate on your debt than what you’ll receive from building a savings account. Target the debt with the highest interest rate. This might be a student loan or a credit card. Some credit cards can have exponentially high interest rates. Pay these accounts off first with the money you’ve saving.
High Yield Saving’s Account
When it comes time to finally start putting money away, you want to pinch every penny. The problem is, most bank accounts give terrible interest rates. Your current bank might only give a fraction of a percent. Unless you have tens of thousands of dollars saved you won’t even notice interest generating. Instead, look for a high yield savings accounts. There are plenty online that give over 2% interest, which is on the same level as many CDs (certificates of deposit).
Top High Yield Bank Accounts Include (as of 4/3/19):
- Ally Bank – 2.20% APY
- Marcus by Goldman Sachs – 2.25% APY
- American Express Personal Savings – 2.10% APY
These are just a handful of the best tips for saving money and chipping away at debt while married. Ideally you will both be working to make this work. While there may be instances where it isn’t possible the two incomes will make saving money that much easier.
By following these tips you’ll start to see the money you owe drop slowly but surely.