According to reports from the second quarter of 2022, the total of all household debt in the United States is a whopping $16.15 trillion. Mortgages make up the bulk of that debt, with student loan, auto loan and credit card debt trailing behind.
On average, adults in the United States carry debt loads ranging between $20,800 and $146,200. If you’re in debt and looking for a way to pay it off, making a plan is a critical step. Find out more about how to get out of debt below.
1. Collect All Your Paperwork in One Place
Before you can get out of debt, you need to know how much debt you actually have. You should also know who you owe and what the terms are, as this can help you prioritize debt payments to pay them off faster.
Start by collecting all your debt paperwork in one place and creating a master list of everything you owe. You can do this in a spreadsheet or with a pen and paper. Information to gather includes:
Statements for all your debts. One way to do this is to spend a month saving all your financial mail and email so you have a comprehensive picture of your debt.
Regular bills that aren’t debts. Your cell phone and utility bills, as well as your rent, should all be included when you gather this financial information. Information about income. Look at paycheck stubs or your bank accounts so you know what, on average, you can expect in income each month.
Your credit reports. Get your free credit reports at AnnualCreditReport.com to ensure you know about all the debt you owe.
Tip: Sign up for ExtraCredit to see your credit reports and 28 FICO® scores in one place.
2. Create a Budget and Determine What You Can Pay Every Month
Using the information you gathered in the above step, create a monthly budget. Make sure you cover all your bills and minimum debt payments. When possible, include an amount that can go toward building your savings. Allocate funds for essentials, such as groceries and gas.
Once you cover all the needs for the month, figure out how much money you have left. How much of that can you put toward extra debt payments so you can start getting ahead on debt?
3. Manage Your Debts in Collections
If you see that you have any debts in collections when you pull your credit reports, make sure you have a plan for taking care of them. Collection accounts have a serious negative impact on your credit score. Creditors may also sue you and try to collect on these accounts via wage garnishments or bank levies if you don’t take action to manage collections. That can throw a huge wrench into your plan for getting out of debt.
Tip: If you don’t enjoy manual calculations, check out Tally. You can use Tally to total up your expenses, pay down credit card bills, and generally figure out where you stand.
4. Consider Your Options
There are two main approaches to paying off debt as quickly as possible: the snowball method and the avalanche method.
The snowball method involves paying off accounts with the lowest balances first. You take any extra money you have—even if it’s just $50—and add it to your regular minimum monthly payment on that small balance. When that balance is paid off, you take the extra $50 plus the minimum payment and add it to the next biggest balance. You keep doing this as you work your way up to larger balances, paying your debt off faster and faster.
With the avalanche method, you tackle accounts according to interest rates. You start by paying off accounts with the highest interest rates first. The thought behind this method is that you save money in the long run by tackling high-interest debt first.
5. Try to Reduce Your Interest Rates
Interest refers to how much your debt costs. If you have a lower interest rate, your debt costs less and you can pay it off faster. Here are some ways you can try to reduce interest rates on your debts:
Ask for a lower interest rate. If you’re a credit card account holder in good standing and your credit history and score has improved since you got the card, you may be able to get a better rate. Call customer service for your card and let them know you are looking for a better deal. They may agree to lower the rate to keep you as a cardholder.
Look into debt consolidation or refinancing. A debt consolidation loan provides funds you can use to pay off higher-interest debts. Refinancing occurs when you get a new loan for a home or car. If you had lackluster credit when you got your auto loan, for example, you may be able to refinance it for a lower rate if your credit has improved.
Get a balance transfer credit card. You may be able to transfer balances from a credit card with a high interest rate to one that has an introductory low APR offer. This may allow you to pay off the debt over the course of 12 to 22 months without incurring any more interest expense.
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Do Your Best to Pay More Than the Minimum
Only paying the minimum on high-interest debt, such as credit card debt, doesn’t get you out of debt fast. It can take years—dozens of them—to pay off credit card balances if you’re only making minimum payments.
Instead, put more than the minimum on your debt whenever possible. You may also want to put any additional funds you receive—such as a tax refund—on your debt to help with this process.
Consider More Options for Getting Out of Debt
Creating a budget, managing your money wisely, and making extra payments toward your debt all help you get out of debt. Here are some other ways you can deal with debt:
Increase your income while cutting unnecessary spending. Join the gig economy with a side job to earn extra money, or sell things you don’t need via online marketplaces.
Undergo credit education and counseling. These services can help you make the most of your monthly budget.
Engage in debt settlement. You may be able to negotiate with creditors, especially for accounts in collections, to settle debts for less than you owe. Just make sure you understand any effects on your credit.
Enter a debt management plan. During such a plan, you make a single payment to a trustee. They use those funds to pay your debts, hopefully in a way that gets you out of debt faster. Declare bankruptcy. If you find you’re unable to pay your debts, much less make extra payments, you may need another option. Chapter 7 and Chapter 13 bankruptcy are potential considerations.
How to Avoid Getting into Debt
Paying off debt doesn’t have to be impossible, but it can be challenging. For many people, it requires altering years’ worth of financial habits. If you’re not already in debt, it may be easier to stay out of it. Create a budget and stick to it, spend wisely and avoid using credit cards for things you don’t need or can’t afford to buy with cash.
Have you ever felt scared, nervous, or anxious around money? Do you set a path for yourself, and then change your mind, worried that it might go wrong?
It’s natural to want to avoid making mistakes, especially when it comes to your money. But indecision can prevent you from getting what you really want.
Here are some ways to reframe your thinking around money, so you can take the small steps that give you the confidence to take bigger steps.
What’s Ahead:
Do you know what you want?
In a general sense, do you know what your financial priorities are?
Sometimes it can be hard to figure out which are your priorities and which are your pressures. Perhaps a parent or partner is pushing you to make a particular decision. It takes a lot of fortitude to stand up to pressure like that, especially if you feel unsure or inexperienced.
But it’s also important to know what your own goals are. What if your dad thinks you should be an engineer, but it’s you who will have to shoulder those loans? Your mom found the perfect car for you — but is she going to help with the car note?
Or maybe you just have a different idea of what is perfect. Perhaps your partner is pushing for a move when you feel you should stay where you are — or wants to stay when you know there are better opportunities elsewhere.
Visualize your dreams
Taking some quiet time to visualize what you want, independent of what others want for you, is the first step toward knowing what to do.
To help you get an idea of what your goals are, you’re going to do a financial visualization exercise. You’ll need a pen, a piece of paper, a quiet room, and a timer. You will visualize your future life, if you could be or do whatever you wanted.
Set the timer for five minutes. For those five minutes, you are going to close your eyes and imagine yourself five years from now. Get as detailed as you can – it doesn’t have to be realistic, and you don’t have to share this with anyone else, just yourself. Be honest.
If you could do or be (or have) whatever you wanted five years from now, what stands out?
How old will you be?
What are you wearing?
Where are you living?
Who is with you?
What are you doing?
Open your eyes and write down what you visualized. What excited you most, or made you feel most at peace?
Whatever it was, write it down and circle it. This exercise gives you an idea of what to work toward, so keep that paper in a secure location and come back to it often.
If pen and paper alone make it difficult to visualize your future finances, try tracking yours through PocketSmith first. PocketSmith can show you your big financial future, making visualizing your goals even easier.
It’s OK if you don’t get it ‘perfect’
There’s no “perfect.” All you can do is make a good-enough decision with the information you have available to you. So many things can be changed later! Making mistakes is how you learn.
I’ve made some incredibly bone-headed financial decisions (including the time I put a whole dang car on my credit card, but that’s another story). The people I love have done dumb financial things, too. (Such as buying meat that “fell off the back of a truck.” Never do that.)
My favorite Maya Angelou quote is this:
“Do the best you can until you know better. Then when you know better, do better.”
Buried within that quote is the permission to learn as you make a mistake.
You can’t get through life with a perfect record or without any bad things happening to you. But what you can do is trust yourself to figure out what to do if things go wrong. If you’re reading this, it means you are willing to find out how to “know better.”
If you’re beating yourself up because of mistakes you’ve made in the past, stop. You don’t have to be stuck as that person: You can learn from that mistake what not to do, and then figure out a way to fix it. It might be very difficult. It might feel impossible. It’s OK if you don’t get it perfect. You know better, so now you can do better.
First, make sure you have a bank account
You don’t have to have all the answers immediately. Give yourself permission to work on one thing at a time. Baby steps are good here because it will break down your financials into manageable tasks.
First things first. Do you have a bank account? If not, you’ll need a safe place to keep your money.
Checking accounts
A checking account is a type of bank account that lets you spend your money by using checks or a debit card. You should have a checking account so you have a place to put your money when it comes in.
Sometimes checking accounts come with high monthly fees, which is why it’s important to shop around a little bit. If you don’t have a checking account currently, you can look for a checking account at a local bank in your neighborhood, or you can look for a checking account at an online bank, which often has lower fees. Consider these points:
Find three possible checking accounts you might consider signing up for.
Look at the fees for each account and compare them. Which has the lowest fees?
Look at the overdraft protection for each account and how much it costs. If you accidentally overdraft, which bank will cost the least?
The bank with the best ratings and lowest fees is probably your best bet. You can usually sign up for a checking account online or visit the bank branch of a physical bank to open an account.
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Savings account
A savings account is a bank account where you keep the money you want to save, which you don’t need for bills or other spending. Look for a savings account at the same bank where you opened your checking account. Or if that is not possible, you can open a savings account at an online bank.
Check if your bank allows electronic transfers. You can often use your bank’s online portal to transfer money from your checking account to a savings account, even at another bank. When looking for a savings account, look for one that pays a good interest rate. Online banks often pay higher interest rates on your savings than physical banks.
If you were intrigued by Aspiration’s Spend & Save account (above), but you’re specifically looking for a savings account, you may be interested in opting for Aspiration Plus. With Aspiration Plus, you can earn up5.00% APY (Variable). You’ll also have the opportunity to earn up to 10% cash-back with purchases you make with Conscience Coalition retailers (companies doing the ‘right thing’ as part of their business model) and unlimited fee-free withdrawals at Aspiration’s network of over $55,000 ATMs. You’ll also get Aspiration Planet Protection feature which carbon-offsets your gas purchases. These perks certainly help offset the $7.99 monthly fee ($5.99 if you pay annually) that is required with Aspiration Plus.
Chime®, another option, offers a 2.00% APY7 with no monthly fees or minimum deposit requirements.2 Plus, you’ll get top-notch features like the ability to round up your debit card purchases and put that money into a savings account automatically.^
Plus, as an added bonus, Chime now allows you to get your paycheck up to two days early if you have direct deposit! Early Access to direct deposit funds depends on payer.3
^ Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account. 2 There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account. 3 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date. 7 The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of November 17, 2022. No minimum balance required. Must have $0.01 in savings to earn interest.
Now, you need to make a budget
Once you have a place to put your money, try tracking it to see where it’s going. Knowledge is power, and this is a very powerful piece of knowledge that can inform your decisions and even tell you a bit about yourself through what you spend or don’t spend.
Start by getting a notebook and writing down what you spend every day, no matter how small. Write down every purchase, including the cash ones, as well as your bills and loans. Do it every day for one month. That is tracking your expenses.
To make a budget, you look to the future instead of the past. Write down how much money you have coming in via your paycheck or other earnings. Include any loans coming to you — every source of money coming in for the month. Then consider all of your expenses that money has to cover: rent or mortgage, car payment, health insurance, bills, food, gas. Go through your last month of tracked expenses to make sure you aren’t missing anything.
Your budget is your money plan for the month. First, you make sure you have enough to cover your obligations, which are your bills. Then once your bills are covered, you decide how to spend what’s left between savings and wants.
There are some simple rules of thumb for making a budget. One is the 80/20 rule, where you put 20% of your money toward savings and use the other 80% for spending. If that’s too simplistic, try the 50/30/20 rule, where you put 20% of your money toward savings, 50% towards bills and other obligations, and the last 30% towards wants. It should help you decide if your current spending is in line.
Either way, you can see that setting aside a good portion of your budget to savings is very important.
You can do this all on paper, but sometimes it’s helpful to have an app help you with the calculations. Here are a couple of great options:
Pocketsmith
If you have trouble getting (and staying) organized, Pocketsmith is a great tool to have.
It’s a personal finance app that’s a little like having a personal financial assistant in your pocket. It can help you plan and budget your money, so you can know today whether you can take a vacation three months from now.
Empower
I thought Empower was only for wealthy people with portfolios to manage, but it actually helps anyone. When you connect your accounts, including loans and credit cards, the Empower dashboard gives you a big-picture overview of your financial situation.
Charts and graphs show you your cash flow month-to-month and even break down your spending categories. (I was a little bit shocked to see how much I was spending on dining out compared to groceries, honestly.) Oh, and it’s free.
(Personal Capital is now Empower)
And now, the not so fun part…debt
Whatever you do, don’t give up on getting out of debt. Keep making forward progress, even if it’s only a little bit. Imagine how much money you’d have each month if you didn’t have to make loan payments! The more you can throw at your loans, the sooner you will be free of them. Even if it’s uncomfortable for a little while, the payoff can be worth it.
Using your budget, look at how much you are spending on your debt and how much you are spending on your wants. Look for where you can trim your wants and non-essentials and put that money toward your debt payments. See if you can add even 1% more toward your debt this month, and 1% more next month, and 1% more the month after that … start small, but you may soon see you can spare 2%, 5%, even 10%, or more.
When your debt is really and truly unmanageable, refinancing might be a good solution: it can sometimes reduce your overall interest rate, lowering the overall interest you pay, and getting you free of debt sooner. Here are some companies to check out:
Earnest
Earnest helps you refinance your student loans, so you pay less interest. It rolls all your existing loans into a new loan, so you have one rate and one payment.
You can also eliminate a co-signer that way. Before you refinance federal loans, though, see whether you’ll be locking yourself out of any forgiveness programs first.
Credible
Credible is an online marketplace that matches you up with the best loans and rates for refinancing based on your personal money profile.
You may be able to reduce your rate this by shopping around through Credible. Or you might at least be able to reduce your monthly payment (though they might extend the length of the loan, so check the terms). The less interest you pay, the better.
Credible Credit Disclosure – Requesting prequalified rates on Credible is free and doesn’t affect your credit score. However, applying for or closing a loan will involve a hard credit pull that impacts your credit score and closing a loan will result in costs to you.
Don’t forget to try to save some, too
Sometimes it feels like there’s nothing left at the end of the month to put toward savings. If that’s your situation, put technology to work helping you find the spare change that can start to add up.
You should aim to put 20% of your money into savings. However, I know that’s not always easy to do, especially when you’re just starting. So keep that in mind as your goal and be OK with starting small. Super small, even. Since you’ve started your checking and savings accounts, you should now have a place to put your savings.
And since you’ve created your budget, you should have a grasp of how much you are spending on bills. Your challenge will be to find small amounts, $5 here and there, which you can safely transfer to your savings account and leave untouched. Here are a few apps that can help:
Acorns
Acorns is a handy little app that finds your “spare change” and squirrels it away for you. Say you make a purchase for $5.75. Then Acorns will round up to $6 and put the extra 25 cents in your Acorns account. It’s a little bit here and there that you won’t notice is missing.
I have a friend who signed up for Acorns, and it helped her save $1,200 in a year – that’s money she didn’t notice over the course of a month, because Acorns rounds up purchases and socks away the change. It’s a way to invest without having a lot of money.
Trim
Another app that helps you save is Trim. It analyzes your spending and finds ways to save your money, even contacting companies and negotiating lower bills for you.
So if you feel like you’re spending too much on your cable bill, Trim can negotiate that lower. Then you can put the money you saved with Trim into your savings account every month.
CIT Savings Builder
Once you’ve found some savings to save, putting it in an online savings account can help you earn money.
Take the CIT Savings Builder: You’ll earn up to 1.00% APY. So if you can add to your account every month, they’ll pay you, too. This is a great way for those facing financial indecision to finally kick the habit. If you don’t save at least $100/month (which isn’t a terrible benchmark), you’ll be stuck with a much lower APY. See details here.
CIT Bank. Member FDIC.
Lean on your resiliency
It’s important to give yourself some grace. As long as you’re trying your best and continuing to learn about money management, you’ll be moving in a forward direction. When you’re feeling stuck in your indecision, remember that you can change your mind later. If you sign up for a new savings account, and it charges way more in fees than you expected, you have two choices: beat yourself up, or simply change accounts. One of those will make you feel like a failure, and the other one lets you dust yourself off and move forward.
Even if the mistake you make is catastrophic (and be honest with yourself, they are rare and you can usually see them coming), you can always rebuild. The worst you can do is bankruptcy, and you won’t be the first (nor the last), and you can come back from it.
The skill of resiliency, of knowing you can find a way to figure it out, is an important one when it comes to managing your money.
You might lose your job, but you can learn a new skill. Better yet, you can slowly build up your emergency fund so that if it does happen, you can be prepared.
Summary
Managing your money can be very overwhelming. It is all too easy to get paralyzed by fear when trying to decide what to do, or to have so many actions to take you can’t figure out where to start first.
It’s OK to go slowly. Pick one small thing each month to focus on. Don’t try to do too much at once or you will get overwhelmed. This month, make it your checking account. Next month, savings. A month after, track expenses. Give yourself grace if you find it difficult, but get back in the saddle and keep trying.
Know better, so you can do better. Take the first step, and savor your wins when you get them. The more experience you have, the more confidence you will have, and then you will have faith in yourself when it comes time to make bigger decisions: Not only faith that you will make the right choice, but faith that, if you make the wrong choice, you can figure out a way to bounce back.
Empower Personal Wealth, LLC (“EPW”) compensates Webpals Systems S. C LTD for new leads. Webpals Systems S. C LTD is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.
Financial goals are meant to help you live your best life, whether that means helping you buy your dream home, affording your child’s education, or taking your mother on a cruise for her 60th birthday. To help you get there, it’s vital to have a budget that works for your situation and aspirations.
Having a budget can help you see where you are financially, know whether you’re on track for reaching your goals, and identify ways you can adjust your spending.
Once you have a budget nailed down — and the math is not as scary as some people think — you can reconfigure and adjust. After all, a budget is meant to work for you so you can reach your money goals, not the other way around. It can evolve right along with you, your needs, and your goals.
Why Is Creating a Budget Important?
Creating a budget is important because it allows you to see where your finances stand: You see how much money is coming and how much is going out, plus what it is being spent on.
It can provide you with a snapshot of your financial life, and it can illuminate any issues you need to address. Think about it: If you don’t know where your money is going, you can easily spend more than your means, leading to more debt than you can handle. Not budgeting can also prevent you from reaching your goals, such as having enough in retirement savings or being able to afford that kitchen renovation you’re pining for.
Although some people think a budget will cramp their style, the truth is that a budget doesn’t have to hold you back, restrict you from fun, or sour your lifestyle. It can eventually set you free from the financial burdens that are keeping you from setting and reaching your ultimate life goals.
Next, learn the step-by-steps.
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1. Determine Your Financial Goals
Setting financial goals is a crucial first step to being more intentional with your money management tactics. As in, having a purpose can give you more motivation to stick to your budget and get you on your way to creating smart financial goals that suit your life.
How to set financial goals? Start by taking time to come up with a clear idea of your short-term and longer-term aspirations. What kind of things could you dream about? Anything that’s ultimately important to you could be a financial goal example, including:
• Having $1,000 in the bank
• Hosting an amazing 30th birthday party for your partner
• Buying a home
• Starting a family
• Getting some new wheels
• Taking a dream vacation
• Getting out of credit card debt
• Starting your own business
• Planning for retirement
• Establishing and maintaining an emergency fund.
2. Calculate Your Income
Before allocating money for various spending categories and goals, you need to know how much money you have to work with each month. Calculate your after-tax income — you can look at your paystub and/or other earnings from your side businesses or second job. Or maybe you are the lucky holder of an investment account that generates dividends. Perhaps you regularly receive bonuses or tips at work. Add it all up.
3. Review Your Expenses
To make a solid, workable budget, you also need to know exactly how much money is typically going out. Pull together all your financial statements and look at how much you typically spend per month in the following budget categories:
• Loans (such as student or car loan payments) and debt (including credit cards)
• Insurance premiums
• Housing
• Utilities
• Monthly food expenses
• Childcare, child support, or related family obligations
• Transportation-related expenses
• Healthcare
• Savings/investments (for instance, 401(k) or IRA automatic savings deductions).
In addition, think about some other spending categories that are more about discretionary purchases. You can also track:
• Dining out (even those lattes to go)
• Entertainment, such as movies, books, concert tickets, and streaming services
• Personal care (manicures, yoga classes, etc.)
• Travel
• Gifts or treating friends to birthday drinks or dinners
• Non-essential clothing, electronics, home furnishings, and any other fun things you might go shopping for.
As you gather this information, you may want to look at a couple of months’ worth of records. For example, your credit card bill may vary considerably, so averaging a few months will give you a more realistic picture than checking a single month.
Once you have an idea of what you spend, it’s time to take a look at where you may be able to make adjustments. Many people look at their spending as “needs” versus “wants.” A need is something required for basic existence, while a want is discretionary spending. Needs also include debt payment, so if you have a student loan or similar monthly expenses, include that in the need category.
Also consider looking at each spending category in terms of fixed and variable expenses. For instance, your mortgage is a fixed expense since it typically won’t change from month to month, whereas entertainment would be a variable expense since it can change. Don’t forget to look at occasional expenses — like semi-annual car insurance payments — so you can set aside money in your budget each month to account for this expense.
4. Choose Your Budgeting Method
Subtract your monthly expenses from your monthly income. How are you doing? If there’s money left over, it means you may be able to meet your financial goals. Otherwise, you may need to either cut your expenses a bit or earn more money (or try a combination of both).
Whichever direction your money is trending in, you can benefit from a budget to get your cash aligned with your goals and provide guardrails for your spending and saving.
While there are a bunch of budgeting methods, what’s most important is to find an organizing principle that works for your personal and financial style. Some options to consider:
The 50/30/20 Budget Rule
The 50/30/20 budget rule breaks up your budget using the following percentages:
• 50% on essential expenses. This category could include housing costs, utilities, car payments, debt payments (student loans, credit card minimums due, etc.), education costs, food, basic clothing, childcare, and medical expenses.
• 30% on discretionary expenses. Your discretionary expenses could include shopping, entertainment, personal care, travel, and other expenses that may not necessarily be considered essential.
• 20% toward your goals. This amount of money can go into savings and investments as you work toward things like an emergency fund, a new car, retirement, and/or your child’s college education.
Recommended: Discretionary Income Explained
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The 70/20/10 Budget Rule
The 70/20/10 rule is another budgeting method. It’s similar to the 50/30/20 one but allocates more money toward your needs (70%) and less to the wants and savings areas. This budget can be a good variation for those who are just starting their careers or anyone who lives in an area with a high cost of living.
Zero-Based Budget
The zero-based budget system gives every single dollar a purpose so that every bit of your income is accounted for. You start with your monthly income then keep subtracting expenses (even savings or a sinking fund counts here) until you get to zero. This system can help you be more mindful since you know how your money is allocated.
The Envelope Budget System
With this technique, you write the name and cash amount you have for each spending category for a month. For example, you allocate $2,000 for housing for one envelope, and $600 for food in another. You can only spend the allocated amount in each category.
If there is no more cash in the envelope but the month isn’t over yet, you will need to wait until the next month to replenish it or borrow from another category and spend less there. For instance, if you need cash for an insurance premium that went up, you could save on streaming services by dropping a platform or two while you adjust your budget.
This method can be adapted to use debit card payments. You don’t have to literally only use cash.
5. Make Adjustments
A budget is a dynamic, living entity. Some months may be more expensive than others. For instance, you might have an emergency one month (your laptop dies) and wind up spending more (or even going into debt) to make ends meet. Life happens: use these situations to learn and readjust.
You can also look for trends in your money. If you find you are living paycheck to paycheck, you might find ways to economize (such as getting a roommate) or to earn more money.
After using your new budget plan, you should review and update it regularly. You may need to do it more often at the beginning of your budgeting journey when you’re getting used to looking at your finances in a new light. Still, it is typically useful to review your spending at the end of each month to see if your budget is still working for you. If not, then take the time to see what may be happening and tweak your spending as necessary.
Another reason you may want to make adjustments is if your life situation changes, such as you have a baby or get a divorce. Or your income may have gone up, so you will need to think strategically about how best to allocate those dollars to help you reach your financial goals.
Monthly Budget Example
Here is an example of a family’s monthly budget:
Total monthly income: $4,650
Monthly breakdown of expenses:
Monthly income
$4,650
Monthly expenses
Rent
$2,000
Groceries
$400
Student loan payments
$337.50
Car payment
$150
Credit card payment
$300
Discretionary spending
$232.50
Utilities
$330
Auto & renters insurance
$150
Career enrichment class
$60
Savings
$400
TOTAL:
$4,360 ($290 surplus)
How to Handle Unexpected Expenses in Your Budget
You know how it goes: Life can be filled with unexpected expenses, such as a car repair or larger than expected medical bills. Instead of letting these derail you, work unexpected expenses into your budget.
There are several ways you can go about it, one of which is to have a bit of a buffer in your account. Meaning, you can allocate some extra cash each month just in case — any money that isn’t spent, you can roll it over onto the next month. It can act as a cash cushion in your checking account.
You can also consider building up an emergency fund, a separate set of savings in case you have unexpected expenses. The amount will vary, but a good rule of thumb for how much to have in an emergency fund is to save three to six months’ worth of basic living expenses.
How to Work With Your Family or Partner to Create a Budget
Creating a budget with others means being open to a conversation about what each one needs, and how you can keep each other accountable. It can start by having a meeting about family spending. You can discuss and agree to budget goals and reasonable expenses and use a budget planner to help you solidify things.
Once a preliminary budget is created, find a way to ensure that everyone sticks to it. Some tactics include having one joint account to ensure everyone can track spending or having an app where your partner or family can see an overview of the finances. Whatever you choose, it’s important to meet regularly to review your budget to see whether adjustments need to be made.
💡 Quick Tip: An emergency fund or rainy day fund is an important financial safety net. Aim to have at least three to six months’ worth of basic living expenses saved in case you get a major unexpected bill or lose income.
The Takeaway
Creating a budget to set and reach your financial goals doesn’t have to be hard, and it can be a great way to guide your spending and saving. While there are many approaches and techniques to try, what matters most is finding one that is a good fit for you personally and helps you feel in control of your cash. By learning how to manage your money well, you can be on track to crush your personal and financial goals, whether short- or long-term.
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FAQ
What is money management and why is it important?
Money management involves making a plan to help you reach your financial goals, such as getting out of debt, saving for a vacation, or buying a new home. Without sound money management, it can be hard to understand your personal finances and reach your goals.
How do I prioritize my expenses?
You can prioritize your expenses by making sure you have an effective budget and sticking to it. You’ll likely want to prioritize basic living expenses and debt payments. Discretionary spending on the fun stuff of life (entertainment, eating out) can be an area to rein in, if needed.
What are some common mistakes people make with their money and how can I avoid them?
Some common mistakes people make with their money include not establishing clear financial goals, not building a budget that works, and not tracking their spending. To avoid them, it’s a wise move to find a budget technique that works for you, to regularly review and tweak your financial goals, and make adjustments when necessary.
What are some resources available for improving my financial literacy?
Your bank likely offers articles and tools to help improve your financial literacy. You can also head to government or reputable sources like the Consumer Financial Protection Bureau, or buy books or listen to podcasts by respected sources. You can also seek the help of a financial professional.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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I’m not the only one who has been thinking about the relationship between money and meaning lately. This is a guest post from CJ at WiseMoneyMatters.com, who is trying to live a rich life even as he works to pay down debt.
“Wealth and riches are not synonymous. Wealth will get you riches, but riches will never make you wealthy.” — Dr. Edwin Louis Cole
I love this quote from Dr. Edwin Louis Cole because it gives me a heart check. It helps me understand my motives for doing what I’m doing.
You see, my goals are to become completely debt-free. I’m getting closer and closer to that goal. Within the last few months, I downsized my house, doubled my income, and was able to pay off all of my debts except for the mortgage. So now all I have left is about $100,000 to pay off before I am completely debt-free.
In order to get to those goals, I’m working extra hard. I work a job that has a great schedule: ten hours a day, four days a week. While that’s nice, it’s 45 minutes away, so I get very little time with my wife those four days.
Then I use my three-day weekends to work on side jobs. I’m a D.J. and videographer for weddings. I also work on my blog, WiseMoneyMatters.com. I do everything possible to earn extra money to help pay down debt.
And, of course, I try to be as frugal as possible. My wife and I are on a strict budget. We each get $100 per month for play money (this includes new clothes, eating out, coffee, etc). Groceries are limited to $200 per month. Everything else goes towards bills or savings.
Be Careful What You Wish For
I’m on the right track toward getting out of debt and becoming rich. I’m doing all of the right things. But why? Why do I want to be debt-free? Why do I want lots of money? I know intellectually that money doesn’t always bring happiness, yet we all strive for more of it, and sometimes at the expense of our own families.
I know too many guys who have built very successful businesses and made large amounts of money and had their family fall apart. I used to be envious of them and what they had. Now I just feel sorry for them.
They wanted riches so bad that it consumed them. They have nice houses and brand-new cars, yet are completely alone. Many celebrities find themselves in similar circumstances.
I hear stories all of the time on personal finance blogs and podcasts about how the drive to get out of debt causes significant conflicts in the home. One spouse goes crazy frugal while the other is a spendthrift. Money-related issues are the leading cause of divorce these days.
What’s the Point?
Let’s say I accomplish my goal of becoming completely debt-free. What then? What will I do with all of that extra money? I’ll probably save for retirement. That’s the next logical step, right? But it all just seems so superficial.
I’m spending my whole life working my butt off so I can be lazy the last 10-20 years of my life. Something about that just doesn’t sit right with me.
I want for there to be more purpose in life than just a selfish dream of ultimate laziness. I want to make a difference in this world. I want my life to be meaningful.
My Purpose
My wife and I decided to give our money away. If we’ve been blessed this much, I feel it’s important to bless others.
We have set aside 20% of our income just for giving to charity. My wife takes girls from our church youth group out to lunch. She just talks with them and helps them through those tough situations that come up for teenagers. We sponsor a girl in India via Compassion International. We give to Teen Challenge to help teenaged boys with drug addictions. We donate both our time and money because time is as valuable (or more so!) as money. I tutor some of the boys in math every Friday. And, finally, we give to our church and to our community.
We also set aside $100 per month for date nights as my family is of utmost importance to me. We take out my wife’s 11-year-old brother every week. He comes from a broken home where his mother is addicted to drugs and brings new boyfriends home all the time. He needs a little stability.
I can tell you that I find so much more satisfaction seeing people’s lives changed than I do watching my mortgage go down another $1,000. I find I am much wealthier than I can imagine, even if I might not be considered “rich”.
Now don’t get me wrong: We are still saving and planning to pay off our mortgage early. Those things are very important to us. But without a purpose, they don’t really matter.
Don’t let the prospects of tomorrow come at the expense of today.
What’s Your Purpose?
So I challenge you: What’s your purpose?
If all of your dreams come true and you pay off debt and make millions of dollars, what’s the point? Is it to satisfy your selfish desires? Or are you going to make a difference? Are you going to pursue those riches at the expense of your family? Or will you set boundaries in order to spend time with the kids, and to take your wife on dates?
Why do you want to be rich?
CJ’s article reminds me of another guest post from last December, in which Jeremy M. asked, “What’s your why?”
Some people never take control of their finances because they’re afraid that doing so would require them to give up everything they enjoy. I don’t believe that’s true. Getting out of debt requires hard work and sacrifice, but that doesn’t mean you can’t have fun along the way.
Aaron recently sent the following e-mail:
You paid off $35,000 in debt in just over three years. Does that mean you were balls-to-the-wall dedicated and had no frills and were dour-faced the whole time? Were you using every spare penny to pay debt? Did you give up all luxuries and all fun? Did paying off the debt consume you?
That’s my greatest fear about the whole thing. What makes it worse is that I’m serious about getting out of debt — I just don’t want to be miserable in the process. Especially since I’m going to be married soon.
Any encouragement you can give would be greatly appreciated.
When a person decides to make a lifestyle change — financial or otherwise — there’s a temptation GO ALL OUT. With the zeal of a new convert, you leap headlong into a life of thrift, for example, giving up everything you valued before.
There’s a problem with this.
Most people who leap from a lifestyle of deficit-spending to one of extreme frugality find the waters very, very cold. It’s a shock to the system. It feels oppressive. They struggle to stay afloat, but before long decide they’re going to sink rather than swim, so return to the warmer, familiar waters, the waters of debt.
I made several false starts before I found my way. I would decide to give up comics completely, or to never buy another computer game. These sorts of goals are foolish. Nobody has that kind of god-like self-control. Everyone needs an indulgence now and then.
Rather than quit cold turkey, I think the best way to begin a life of frugality is by taking small steps. Small steps eventually become big strides, but only after you’ve developed your frugal muscles.
Testing the Water
When I was working to pay off my debt, I was not obsessed. I did not give up all luxuries and fun. I was dedicated, yes, but debt reduction did not consume me. For much of those three years, I was struggling to figure things out. I didn’t suddenly move from clueless spender to clued-in saver. It was a gradual process, one that’s not even wholly complete today.
I started to focus on debt reduction in October 2004. In January 2006, over a year into my quest, I had one of my worst financial months ever. I spent over $1,000 on comic books. (I was buying expensive hard-bound compilations.) I’m almost ashamed to admit that, but it’s true: for that month, I spent more than I earned.
That’s an extreme example, though. Most months I made smart decisions with money, and gradually improved my situation. Measures that seemed extreme at the beginning became much easier by the end. When I started to get out of debt, I thought of cable television as a Need. By the end of the process, I saw that it was a Want. That’s just one example; I cut back in many areas. But again, these changes did not occur overnight.
Finding Balance
For some people, the gazelle-like intensity espoused by Dave Ramsey is absolutely the right way to go. But I believe that the people who succeed with this sort of devotion are those who actually learn to enjoy extreme frugality. They don’t feel like they’re making sacrifices. The rest of us need some sort of balance.
In my case, my most austere period came after I had re-paid my debt. When I quit my job at the box factory last spring, I spent a few months being too frugal, and I was not happy. It was then that I discovered the balanced money formula, which I’ve mentioned frequently over the past few months. Adopting this technique helped me to continue saving while also allowing room for fun. The same thing can be done while you repay your debt.
Yes, you should cut back as much as possible. Yes, thrift and frugality are important tools to meeting your financial goals. But I believe it’s important to develop sustainable financial goals. If you’re miserable, or if you cut your spending so far that you cannot maintain it, there’s a risk that you’ll lapse back into old habits.
There’s no one right path to debt-free living. Each of us has different priorities. To find the way that’s right for you, you need to set financial goals, draft a spending plan that moves you in the direction of these goals, and then practice patient persistence. And let yourself have a treat now and then.
Only after you have gotten in the habit of making regular increased payments towards your debt should you begin exploring other debt elimination tricks like debt negotiation and debt consolidation. All of the shortcuts in the world can’t help you get out of debt if you do not first develop the self-discipline to live within your means and devote additional income to paying down your debt.
This next part of my Debt Free in Seven Steps system is to find these short cuts that can help you get out of debt faster–and for less.
Step Four: Negotiate interest rate reductions from your creditors and/or consolidate balances in lower rate accounts.
What’s Ahead:
First, call your card companies!
The first step anybody with credit cards should take is to request an interest rate reduction from your credit card companies. Why in the world would a credit card lower my interest rate? Four times out of five they might not. But if you ask, and ask again, they will likely give you a rate cut to keep you as a customer. If you haven’t noticed your mail box overflowing with “pre-approved credit card offers”, the consumer lending industry is lucrative but it’s also competitive.
Call your credit card’s 800-number and just ask to have a lower interest rate. Tell them you received balance transfer offers and will take your balance elsewhere if you can’t get a better rate. If they say no, ask to speak with a supervisor. If that proves fruitless, call back again tomorrow. Most credit cards will eventually lower your rate if you harass them, and it’s a move that will save you hundreds if not thousands of dollars.
This debt negotiation tactic will work best if you are in good standing and don’t have a number of late payments in the last year. If, however, you are being charged a higher interest rate or “penalty APR” because of your late payments and are now paying on time, call and request a return to your usual rate. Most creditors will not refuse such a request from somebody who is paying in good faith.
Balance transfers
If your credit score is good, you may be able to qualify for one or more credit cards with 0% balance transfer offers for a year. Compare and apply for balance transfer credit cards and move high-rate balances onto the 0% card. Do NOT, however, use the new cards—or the old ones for that matter—to make new charges. Cut ’em up. The point of getting the new credit cards is only to save money on getting out of debt.
Debt consolidation
Another tool at some debtors’ disposal is debt consolidation, or the process of moving two or more credit cards or loans into a new loan, usually with more favorable terms like a lower interest rate. Mortgage lenders frequently advertise mortgage refinancing and home equity lines of credit as debt consolidation options, and introductory-rate credit cards make balance transfers a tempting debt consolidation option.
Be careful, however, with debt consolidation. Most people are in debt because at some point they spent beyond their means. Consolidating debt frees up credit and lowers the minimum debt payment you make each month, making it tempting to loosen your spending belt a bit. A few months of a dollar hear and two dollars here can add up quickly to yet another ugly debt.
If you decide to consolidate debts into a credit card balance transfer, for example, cut up your old credit cards and do not activate the new card—use it only to carry the transferred balance. The less available credit you have at your disposal, the less likely you are to backtrack.
Moving on…
Once you have taken advantage of any debt negotiation or debt consolidation techniques, it’s time to move onto Step Five: Automate Your Debt Payments. Or, check out all the articles in my Debt Free in Seven Steps system.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
It is no secret that the internet is changing how money is made forever.
This has caused a boom in many businesses and people the ability to make money online, which is a huge benefit for you!
This trend will only continue as technology improves. If it feels daunting to jump onto this new bandwagon right now, don’t worry; we have some tips that can help you double your 10k in the next few weeks or years.
I am going to show you how to double your money so that you can retire early, pay off debt and invest in the stock market.
A lot of people would say this is impossible, but I’m not just showing it–I’m proving it!
We all have said it takes money to make money and while that is true. It is easy to start doubling your money with just $10K.
What if, right now, you decided to double your 10K by the end of the year? Maybe, you want to hit a major goal and make a huge change in only 8 short weeks?
Making money is not a difficult task. Too often, people become impatient and think that they can simply make money without putting in the effort. This is not true.
Cash is a tool and nothing more. Once you understand this concept, you can begin to figure out how to make more money. Additionally, it’s important to appreciate that it takes time to make money – don’t expect to become a millionaire overnight.
Here is a realistic guide to help you work towards that goal.
Be sure to decide which strategic way to double $10k quickly works best for your personality.
The 10K of your dreams seems impossible.
How can I double $10000 fast?
There is no one-size-fits-all answer to this question, as the best way to double your money will vary depending on your individual circumstances and goals. However, some general tips include developing a growth mindset around money, finding ways to make more money, and investing in yourself and your skills.
Keep in mind that $10,000 is not a lot of money to double in a short period of time.
How long does it take to double 10k?
The answer to this question is dependent on a number of factors.
The most important factor is the amount of time it takes for your investments to double.
If you are investing in stocks, you can quickly double 10K with an options contract within 2-3 days. If you are looking at other avenues, it will depend on how you choose to double your money.
Typically, people start seeing results in approximately 4 to 6 months to double 10k.
If your eyes are set on this, then make sure to write down one of the millionaire quotes for motivation.
What to do with 10k?
Now that you’ve earned an extra 10k, you may be wondering what to do with it.
You could save it, spend it, or invest it, but there are a few other things you could do as well.
Here are some ideas on how to make the most of your money and grow it even more.
How can I Double my Money?
There are many ways you can double your money in a short amount of time.
I am passionate about exploring the best ways to make money online. In this article, I will share some tips on how you can double your money relatively quickly. However, please keep in mind that these are general ideas to get you started.
Specifically How to Double 10k Quickly?
If you are serious about how to double your 10k fast, you will need to dedicate time on a regular basis to the tasks needed to reach your ambition. The key is to do it daily in order to keep the momentum of your progress going.
Earning money is a mindset.
To double 10k quickly, learn how to change your mindset about money.
Although doubling $10,000 may seem difficult, it can be done with the right approach.
If you have $10,000 and want to double it within a month or a few months, here are a few realistic strategies to help you reach your goal.
Idea #1 – Swing Trading with Stocks
Swing trading is a technique that allows investors to hold onto stocks for a period of time, typically two to four days. During this time, the trader watches for specific price patterns and buys or sells shares based on their analysis.
One former assistant principal, Teri Ijeoma, changed her life when she left her job as an educator and become an active trader.
Check out: My Personal Trade and Travel Review
This type of trading can be very profitable if done correctly, as it allows the trader to make twice their investment in a short amount of time.
The key is you must learn how to invest in stocks for beginners. This is one step many people overlook when they are focused on doubling their money. Either you will get lucky or you will have a huge loss. Take time and become educated on swing trading stocks.
Related Reading: How Fast Can You Make Money in Stocks?
Idea # 2- Cryptocurrencies
Cryptocurrency is a digital or virtual asset that uses cryptography for secure transactions. Cryptocurrencies are growing in popularity and may become a major part of society. Bitcoin, the first and most well-known cryptocurrency, has seen its value skyrocket in recent years.
Cryptocurrencies are often unstable because they are not regulated by any government or financial institution, and thus their value can change rapidly. However, the potential for reward is high, making cryptocurrency an attractive investment option. Because of this, cryptocurrency investments are often seen as riskier than traditional investments, but also have the potential for greater returns.
Before investing in cryptocurrency, do your research and be sure you understand the risks involved. There are many educational resources available to help you get started.
Idea # 3 – Flip Items for a Profit
Retail arbitrage is a practice where an individual or company purchases a popular product at a discounted price and then resells it for profit at another online retailer. This can be done on marketplaces like Craigslist, eBay, and Facebook Marketplace.
This is a great way to make some extra money on the side. You need some time and a willingness to invest, but if you find the right deals, you can make a good return on your investment.
Many people have great success by flipping items from auctions, free groups, or local goodwill store.
Check Out: Flea Market Flipping
Idea #4 –Resell Products on Amazon FBA
Amazon FBA is a service for independent entrepreneurs who want to start their own e-commerce business. They can offer products on Amazon and work with Amazon directly to fulfill orders, collect payments, and provide customer service. By doing this, they don’t have to worry about the inventory and can focus on other aspects of their business.
This is another avenue for selling your flipping treasures.
There are a few ways to make money through reselling products. You can either find products to sell on Amazon or Ebay, or you can dropship products from a supplier. If you want to find your own products to sell, you’ll need to do some research on what is selling well and what prices are competitive. If you want to dropship, you’ll need to find a supplier and create an account with them.
Idea #5 – Start a Business or Invest in a Franchise Company
Starting a business is not easy. It requires a lot of work and effort, but if you’re willing to put in the time and effort it can be very rewarding.
Starting your own business is one of the most difficult things you can do, but it’s also one of the most rewarding. There are many different businesses you can start that have low overhead costs, so it’s a great way to get started.
Think of the things you enjoy doing or any hobbies you have. Look for business opportunities that line up with your interests. Then, it makes working much easier.
Here are great ways to make money on the side:
It is possible to make more money on your business than you make more money in your current job or career.
Idea # 6 – Real Estate Portfolio
Real estate is a recession-proof business.
There will always be people who need to rent or buy dwellings in boom or bust economic times.
Real estate can be a lucrative investment, but it is not without risk. A lot of people have invested in real estate and lost money, but an investor who does their research and finds a good deal can make a lot of money.
Idea # 7 – Increase Your Income
If you’re not happy with your current income, don’t worry! You can increase it this year.
This is the year that many experts are predicting will see the biggest wage growth in years. So start planning now and you could see a significant increase in your take-home pay.
More than likely, this could be your seed money of $10k to fund the start to doubling your money and making $20k.
Related Reading: How Much Do I Make Per Year?
Idea #8 – Advertise and Gain Clients
If you are a small business owner, then this one is for you. Start advertising as a way to gain more customers.
There are a number of ways to make your services more accessible and appealing to potential clients. One way is to spend money on promotions and advertising. Advertising can be effective in reaching your goals, surpassing your double your money goal of $20,000 in revenue.
There is no doubt that advertising your services will increase the number of customers you have. The more people who know about your business, the more likely they are to use it. And as we all know, the more customers you have, the quicker you earn more money.
It’s a simple equation: More customers equals more money.
Idea # 9 – Invest in Stock Market – ETFs & Index Funds
Investing in the stock market is a process that requires careful consideration and research. Index funds have become an increasingly popular investment option for many investors. ETFs are known as Exchange Traded Funds, which are also a popular investment option.
Both index funds and ETFs provide investors with the ability to invest in a diverse range of stocks, making them ideal for any investor who is looking to diversify their portfolio.
Investing in an index fund is one of the best ways to build wealth over time.
This is probably the slowest way to make money quickly in the stock market, but it comes with less risk.
With a mutual fund, you are essentially investing in many different stocks, which means that you get to choose how much your investments grow each day. This can be a great way to ensure that your money is working for you – and growing – even when you’re not able to actively monitor it yourself.
Just to know, investing in bonds will eventually double your money, but it will take more time as the rate of return is less.
Idea #10 – Start a Mining Farm
Cryptocurrency mining is a process by which new coins are introduced into the market. In order to do this, miners use computers to solve complex mathematical problems in order to receive rewards in the form of new coins. A cryptocurrency mining farm is a way to pool together multiple computers in order to increase the chances of solving these problems and receiving rewards.
Starting a mining farm is a process of investing in cryptocurrency or blockchain technology.
Mining farms can be started with as little as $500, and they are commonly used to mine cryptocurrencies like Bitcoin, Ethereum, and ZCash. Although the process of mining cryptocurrency is not always easy, it can be lucrative for those who invest in the process.
Starting a cryptocurrency mining farm can be lucrative, but it’s important to do your research first. The farm will require a lot of power and will have a rate of return of around 18% (source).
Idea #11 – Share Cash with P2P Loans
Peer-to-peer lending is the act of lending money to borrowers through a P2P lending website. These websites act as an intermediary between lenders and borrowers, and most sites allow you to lend money to a dozen or two applicants. The interest rate you earn on your loan depends on the P2P website you register with, but it typically falls between 3% and 36%.
When considering a P2P loan, it is important to remember that you are entrusting your money to a stranger. Because of this, it is crucial to take the time to review and assess as many applicants as possible in order to find someone who you feel is most likely to pay back their loan.
P2P loans can be arranged without any collateral or credit check.
Idea #12 – Buy Initial Public Offerings
When a company decides to go public, it sells shares of its stock to the public. This is a way for the company to get more money, and it also allows people who invest in the company early on to make a lot of money if the stock prices rise.
The share price of a company can be very volatile when it first goes public. This can lead to significant growth for the company as investors buy and sell shares rapidly. However, this volatility can also lead to losses if the share price falls abruptly.
You must know the underlying stock value before looking at IPOs as a way to double your money. Many current stockholders are required to hold their stocks for a certain number of days after the IPO. Typically, the stock price falls after the hold period expires.
Idea #13 – Make Money with Airbnb
There are a number of ways to make extra money, and renting out a room at Airbnb is one of them. You can also learn how to make money from home by becoming an Airbnb host.
By doing this, you can provide a valuable service to people who are looking for a place to stay, and you can also make some extra money on the side.
Learn how to start hosting with Airbnb today.
Idea #14 – Flip Some Furniture
Flip furniture is very trendy right now. There has been a recent resurgence in popularity for antique and vintage furniture, and people are buying pieces and restoring them themselves. This can be a great way to make additional money without spending a lot of money.
There are a number of ways to quickly turn a profit by flipping furniture.
Spend some time researching the best methods and finding a niche in the market that you can exploit. With a bit of hard work, you can easily double your investment in no time.
When you are looking for furniture to flip, it is important to do your research and become familiar with the different places you can find quality pieces at a low cost. Local antique stores will often have hidden treasures, so be sure to check them out. Additionally, watch for yard sale notices in your area; people are often willing to sell high-quality furniture at a fraction of the price. Finally, estate sales can be a great place to find unique furniture pieces that you can resell for a profit.
There are many ways to sell furniture, but when you are starting out, it is best to use popular platforms like Facebook Marketplace, NextDoor, Craigslist, and others. Once you have more experience, you may want to create a website and online storefront.
This can be a fun and lucrative way to grow your money.
Idea #15 – Pay Off Debt Strategy
This idea of getting out of debt may seem backward, but this is one of the fastest ways to find extra money in your budget.
There is no doubt that paying off your debt is one of the smartest things you can do for your financial future.
Not only does it reduce the amount of interest you are paying each month, but it also frees up more money to save and invest. Additionally, by paying off high-interest debt first, you are essentially making an investment with a very high return rate.
Once your debt is paid off, you can save your first $10000 which you can now use to quickly double to $20000. This will help you achieve your financial goals faster.
Idea #16 – Online Courses & Coaching Programs
Coaching is a huge business – reaching $11 billion in 2022 (source). People are actively searching for coaching and online courses for personal development.
Coaching programs are designed to provide guidance and support for individuals in order to improve their skills, knowledge, or habits. Coaching programs can take the form of one-on-one sessions or group sessions. Some coaching programs are designed for specific topics like career development, personal growth, or relationship issues.
If you don’t want to work one-on-one as a coach, you can create an online course that can be viewed at any time.
If you have passion, you can likely find people that want coaching.
Idea #17 – Buy a Fancy Car and Uber
You could buy a new, luxury car and become an Uber driver. This would allow you to make money while driving people around in your fancy car.
If you’re looking to make some extra money, driving a luxury car for Uber could be a great way to do it. Not only will you make more per trip, but you’ll also get to drive a nicer car. Keep in mind that if you drive full-time, you could easily double your $10,000 investment.
Driving a luxury car for Uber can get you up to 50% more fares. The extra money can be great for those looking to upgrade their lifestyle or simply want to make some extra cash on the side.
If you want to buy a fancy car and use it for Uber, make sure you have the appropriate insurance. This will protect you in case anything happens while driving.
Idea #18 – Learn a New Skill
A new skill can help to increase your income by allowing you to do things that you couldn’t do before. For example, learning how to code can allow you to start a new career in tech or programming.
Additionally, many skills have the potential to double your income quickly if you are able to find a way to use them in high-demand areas.
It is always a good idea to invest in learning new skills.
There are many places where you can learn, including online and in-person courses. The key to success is jumping in with both feet and really dedicating yourself to learning the skill set. Once you have it down, new opportunities for income will be available.
Idea #19 – Work More Overtime
Working overtime is a great way to earn extra money. You can earn up to double-time pay for working more than 8 hours in a day or 40 hours in a week.
Overtime is becoming more common, so be sure to ask your employer if you can work some extra hours.
In order to make $10,000 in one month from overtime, you would need to figure out how many extra hours per work you need to work.
Idea #20 – Some Gambling?
This is the RISKIEST option of all of them. And highly not recommended as a strategic way to double $10k quickly.
Gambling is a way to risk cash in the hopes of making more cash.
While it can be thrilling and exciting, it’s important to remember that gambling is also a form of entertainment that comes with risk. If you’re able to afford it, gambling can be a way to double your money- but be aware that you could also lose everything you put in.
What is the quickest way to double your money?
How to double your money quick is simple. You need to side hustle and start a business.
Also, the stock market is a simple way to double your money with the rule of 72.
Following billionaire morning routines can be helpful in setting up solid habits for success.
How can I double my money in 24 hours?
The answer to this question is simple… Doubling the money in 24 hours is not practical or doable. You might be able to double your money in 24 hours, but it’s also possible that you could lose everything in one day.
Pay attention to scams if you think you can double your money in 24 hours.
You are better off learning how to make 10k a month.
Which investments are the safest and which are the riskiest?
First of all, it depends on your education, experience, and background.
The best way for someone to double their income is by leveraging their time with the right strategies.
Investments that are considered safe are investments that have an average return on investment of about 8-12% per year. Investing in index funds and ETFs typically have a lower risk. Investing in individual stocks is riskier, but they have an average return on investment of about 10-75% per year.
The riskiest option is the idea that you don’t understand how to double your money and you could end up losing more money.
Best Way to Invest 10K
The best way to invest 10,000 is through stocks. Investing in stocks can be risky and make you lose money, but it also has a high potential for gaining value.
As such, this topic needs to be done in more depth to understand how investments in the stock market work. For now, here are some articles to start to understand the returns of stock investing.
Learn all of the ways you can learn how to invest 10k.
You must do your research on companies, know your risk tolerance, understand the volatility of the markets, and be wary of the news.
Which Strategic Ways on How to Double my Money Quickly will you Pick?
You can choose from many classic way and options, but here are a few that we think would be the most effective.
Thankfully, there are many ways to make money online. But when it comes to making a quick buck, which approach should you take?
In this post, we have outlined the 20 popular routes to double your $10k fast. Your retirement plan relies on your investment of 10k.
However, any of these options is a time-consuming process that takes a lot of hard work and dedication. So, you cannot quit halfway through when things get tough.
This is what you want to do in order to be financially secure and take care of all your needs.
Be successful in doubling your 10k by setting a deadline to make it happen.
Then, your next goal will be how to turn 10k into 100k.
Know someone else that needs this, too? Then, please share!!
“I can’t believe I’m going to be 30!” I told my Dad at the beginning of the year. As I had said the same thing when I turned 20, I knew he would reassure me that 30 actually wasn’t that old.
“Nope, 30’s old,” he said.
Getting older doesn’t bother me; I actually embrace it and all the experiences that come along with it.
That’s also something I say just to make myself feel better.
But it’s working. And as I enter into a new decade of adulthood, I’ve been thinking about my financial situation. How much savings should I have at 30? Financially speaking, am I where a 30-year-old should be? What financial goals should I have at this age?
Let’s find out.
How’s My Retirement Plan Going?
Ah, the age-old financial question — how much should you save for retirement? It’s been covered pretty extensively, and ultimately, it’s about what works for you, as there are so many variables to consider. Especially with my fluctuating income, it’s hard to set standards based on how much I earn. For now, I am saving based on last year’s income, even though this year’s might not be as high. I’d rather err on the side of saving too much, unless the difference becomes drastic.
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But I should be saving even more for my retirement for two big reasons: 1) As I mentioned, my income may vary, so I should save a lot while I can. 2) I don’t have an employer to match any of my contributions.
But before I decide how much more, how much savings should I have at 30?
Fidelity says you should have a year’s salary saved in retirement by age 35. By age 45, you should have three times your income. Judging by that, I should probably have about half of my annual income saved today.
Our friends at Financial Samurai have this to say about where you should be with your retirement savings in your 30s:
“Whatever the case may be, by the time you are 31, you need to have at least one year’s worth of living expenses covered.”
Going by Financial Samurai’s standard, I’m good. My living expenses are relatively low, so I’ve already reached that milestone. But by Fidelity’s standard — half a year’s salary — I’m almost, but not quite, there.
If I put in about $200 extra a month, I should have roughly half a year’s salary in my retirement by the end of the year. I need to increase my contributions, but I’m already maxing out my IRA. And I hate to admit it, but, based on last year’s income, I’m not even hitting the old 10 percent standard.
And here I thought I was doing well.
To my credit, however, last year was a good year income-wise. I may be over-estimating my savings, as this year I might not earn the same amount. But again, I’d rather save too much than too little.
It’s due time to consider additional retirement options; I should probably already have opened a self-employed 401(k). Thus, Financial resolution #1: Save additionally for my retirement and open a new account.
Where Should I Keep My Medium-Term Savings?
As my 30th birthday approaches, I also happen to be at a fork with my emergency fund. I have more than six months’ worth of living expenses saved and still have enough to pay taxes at the end of the year, since I’m self-employed.
But as I get older, there are certain milestones I should start saving up for. A house? Children? Another cat? Who knows! I’m still not quite sure if I want any of those things within the next five years. But I’ll probably make a decision within that time frame, and I’d like to be financially prepared either way. Now is the time to start saving for whatever the near future may hold.
My 20s were spent getting out of debt and building an emergency fund. I feel like 30 is an age at which I need to start being proactive with how I’m saving. As J.D. once wrote:
“If you hide your money under a rock, your investing skill isn’t particularly good. Although you might think you’re protecting what you’ve saved, you’re actually losing money to inflation.”
Related >> Is investing optional?
So I’ve been investing in my investment education. I’ve diversified my IRA, and my ROI is pretty average. As a novice, I’m OK with average for now. But while I continue my investment education and also decide what it is I want to save for, I plan on doing a couple of things.
Between three and five years is the time frame that I think I might need this money — maybe longer. While I’d like to open an index fund, I’m a little concerned about the risk, especially if I end up wanting the money in the semi-short term. Opening a CD is an appealing option, but the rates aren’t that much better than my savings account.
I can open one or the other, or I can split my savings between both. It’s a decision that I’m in the process of making, and I’ll let you know how it goes. In the meantime, the point is, at 30, it’s about time to start saving smartly. Financial resolution #2: Decide where I want to park my medium-term savings.
Preparing for and Safeguarding the Future
It’s time to make a risk-management checklist. Oh, that’s right. Robert Brokamp already did this for me! He’s great like that.
It’s time to visit some items on this list. That’smy third financial resolution: Prepare for and safeguard the future.
I won’t rehash Brokamp’s entire list. Some items won’t apply to me for a while; some I’ve already got covered. But there are a few things that I’ll need to work on as the future nears.
Asset Protection
While I already have renter’s and auto insurance, taking an inventory of possessions is a great idea, and umbrella insurance is something to consider, too, although I don’t have that many assets.
“Your personal tragedy will be less tragic if you can prove to the insurance company what you owned,” Brokamp writes.
Indeed. Years ago, I worked at a small engineering company. Our building caught on fire one morning and burned to the ground. I spent the next six months interviewing everyone at the company and taking an inventory of every single asset. Amid so many other frustrations, my boss told me that we’d likely have to prove much of what we were claiming.
Thus, part of my third resolution is to follow Brokamp’s advice by taking an inventory of my possessions and looking into risk-management checkpoints for the near future.
Preparing a Will
I hate to admit it, but this is something I haven’t thought about much, despite its importance. Preparing a will, along with other important documents Brokamp mentions, is another financial goal as I turn 30.
I got out of debt and saved some money in my 20s, and maybe that deserved a pat on the back. But as I enter the next decade, it’s time to enter the next era of my finances. I’ve only listed a few major financial resolutions here, but some of them already seem challenging, and there are probably more I’ll discover along the way.
On the bright side, not only will my finances be in better shape, but some of these goals might make for decent GRS topics. Personally, I’m interested to learn more about self-employed 401(k)s and where to put my medium-term savings.
Are there topics you’d like to see fleshed out? Do you have any additional input on what a 30-year-old’s financial goals should be?
Note: We’re not encouraging people to go out and sign up for credit cards, especially if you have debt or plan to carry a balance on a card. (The interest you pay will wipe out any rewards benefits.) But if you can control your spending and pay your bill on time and in full every month, Holly’s money hack may work for you. Also keep in mind that your credit score takes a hit each time you open a card, and whatever balance you have on your credit card as of the statement closing date will be reported to the credit bureaus. If you pay the balance in full before the statement closing date, your balance will be reported as $0.
Almost two years ago, we began our journey out of debt. Like the average American family, we had car loans, student loans, and consumer debt. At one point, we were making minimum payments on several credit cards and a loan I took out to buy a Kirby vacuum. I’m serious.
However, getting pregnant with our second child made us realize that we needed to get our finances together quickly. Once we committed to new financial goals, we cut out nearly everything from our life that was “enjoyable.” We said goodbye to cable TV and dinners at restaurants. We quit shopping for fun and only went to the store to get groceries and absolute necessities. Our new budget was cut down to the bare bones…so much so that I hesitated to buy almost anything.
As the months flew by, we began making huge strides against the debt that we had burdened ourselves with. Once we became debt-free, we realized that we had become addicted to our new, frugal lifestyle. Having no consumer debt had freed up a lot of cash to save and invest, and we quickly got serious about building wealth. However, having a strict budget made it difficult to do anything spontaneous like see a movie or have a date night. I began to look for a way to supplement our income with some “fun money” without ruining our short- and long-term goals. It was around that time that I got my first credit card sign-up bonus offer in the mail.
Enter credit card rewards
I couldn’t believe my eyes when I read a direct mailer from a major issuer promoting their new credit card. “Spend $500 in 3 months and earn a $100 statement credit.” Could it really be that easy? Why would they give away $100 in free money? As I read through the disclosures carefully, I determined that there was no “catch.” Truthfully, the issuer was offering a $100 bonus just to get new customers to try their card. As long as I paid off the card in full and accrued no interest, this $100 would truly be free money. Since our grocery spending approaches $500 on a normal month, I knew that we could reach the spending requirement easily and I decided to give it a try. Within the first month, we put our regularly planned spending on the card. The bonus points, equal to a $100 statement credit, were quickly credited to my account. I was hooked.
Soon after that, my husband applied for the same card and earned the $100 bonus just for doing our regular shopping. We then moved on to new cards in order to earn a new sign-up bonus. Another card from that issuer, which had better perks, required that we spend $3,000 in three months in order to earn a $400 statement credit. Since we had some upcoming expenses that could be put on credit, we each signed up. We put two family vacations and our regular monthly spending for groceries and gas on each card and easily earned $800 in statement credits. Since we were going to spend the money anyway, these bonuses were truly “free.” We used the $1,000 that we had earned up to this point on some fun activities with our children. I was also able to surprise my husband with last-minute tickets to see his favorite musical, “Les Miserables,” and a new grill for Father’s Day.
Is this wrong?
Obviously there are some people who would say that we are gaming the system. Their argument may be that the credit card bonuses are meant to secure long-term customers, not to provide some extra cash to take my family to Applebee’s. Some may feel that we are just using the banks for our own gain.
I don’t see it that way at all. Actually, to a certain extent, some of their strategies have worked. For instance, I plan on keeping the perkier card because it has no foreign transaction fees. I have also found that this particular card comes with great customer service. Calling the 1-800 number on the card quickly connects me with a real, live person at any hour of the day or night. I would have never tried the card if not for the sign-up bonus. So, in that respect, I feel that the issuer did earn a long-term customer.
I also definitely do not feel bad that I never pay interest. For every person like me who pays their balance in full every month, there are far too many people making the minimum payment. Additionally, banks earn money from retailers just because they choose to take credit cards as payment. Simply put, when I spend $100 at the grocery store, they have to pay the credit card company a certain percentage of my order.
Moving forward
In the past two months, we have moved our spending from those cards to another issuer’s premium card. Their new offer of “Spend $2,000 in 3 months and earn $250 in gift cards” was just too good to pass up…especially with Christmas just around the corner. Since we will put our gas, groceries, and our entire Christmas shopping budget on the card, we will easily reach the spending requirement and, thus, reap the rewards.
Chasing reward deals certainly isn’t for everyone. However, it has definitely made a difference in our bottom line. It has provided us with some extra money that doesn’t have to be accounted for. I can spend our rewards on gifts or something fun and not feel like I have sacrificed what is important to us. And now that we are completely out of consumer debt, I am actually finding that using credit cards helps us stay on budget. Both of the issuers have websites that make it quick and easy to track what I have spent and where.
Is this strategy right for you?
Before entertaining any credit card sign-up bonuses, I would ask myself a few questions. Are you in debt? If you are in credit card debt, then it is a bad idea to pursue credit card rewards. In fact, you might consider cutting up your cards or putting them somewhere not easily accessible. Work on getting out of debt and staying out of debt instead.
Do you have trouble tracking your spending? If so, then pursuing rewards offers may not be for you. While I tend to use one card at a time, some people try to juggle multiple offers at once and end up getting confused. If you are worried about losing track of your spending, then please skip using credit cards altogether.
Are you worried about your credit score? Remember that applying for new credit too frequently can reduce your score and make it harder for you to get the best rate for a loan. Please take into consideration how applying for credit will affect your credit score and do what is in your best interest.
Do you try to earn credit card rewards? If so, what is your favorite credit card rewards program?