Create a Budget and Stick to It
This one is going to be difficult for me. Obviously I know how to budget but, as a young woman in her twenties, there are plenty of tempting things to spend my money on. I’ve taken the first step to getting control of my finances (and debt) by creating a new budget. My monthly budget looks a little something like this:
- Rent at the hotel $1,130
- Food/Entertainment $500 (includes Netflix, Amazon and gym – one of which I’ll be cutting)
- Student Loan payment $262
- Car payment $156
- Car insurance $147
- Phone payment $90
- Gas $40
The remainder of my paychecks are going to go towards paying off some of my smaller debts (including a $1,400 item keeping me in a hotel and not an apartment). I think that this budget is manageable and is something I’ll be able to stick to.
After creating my budget I sat down and was able to create deadlines for each of my debt items (the $1,400 item being first). By January 30 I will have paid that item and in just two months (by March 30) I’ll have paid off the rest and created a little savings to get moved into an apartment.
Make More Money
One way I’ll be able to get out of this amount of debt within the first few months of 2017 is that I will be focusing on making more money. I will be doing additional hours at work, picking up more freelance work when possible and make more money. Not only will this help me financially but it will also help me stay in instead of going out and spending money (because I’ll have to work).
Debt Snowflake When Possible
Whenever I get any “windfall” money in 2017 it will go towards paying my debt or into savings. For example, my birthday is in January and there’s a chance I’ll get a few cash gifts sent to me from family members. All of this money will be set aside to pay off my debts.
Stop ‘Treating Yourself’ and Start ‘Treating Yourself’ Better
I am a hard working person so every now and then I take on the “treat yourself” mentality. It is usually very satisfying in the moment but I hate myself and my finances afterwards. So, instead of “treating myself” monthly I will reward myself with small things when I get debt paid off. For example, after I pay my $1,400 I am going to go to dinner. I also aim to take the time I would usually spend “treating myself” and workout instead (i.e. “treating yourself” better).
Now It’s Time to Save
Once I’ve gotten my small debts paid off (by March 30) I will begin to save. First I’ll establish a $1,000 emergency fund and then I will save for apartment fees/moving costs. After I’ve gotten settled into an apartment I will continue to save for a car (and paying off that pesky student loan debt).
I’m extremely optimistic about my approach to my debt in 2017. Will you be tackling any debt or savings plan in the new year? What’s your approach?
Photo: Images Money
Amanda Blankenship is the Director of Social Media for District Media. In addition to her duties handling everything social media, she frequently writes for a handful of blogs and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.