Two Simple Strategies to Save Money and Pay Off Debt

Saving Money and Paying Off DebtThere’s always an excuse for not saving money or paying off debt, but neither of this things has to be extremely difficult or arduous. There are two very easy and simple ways to do both.

Goals and budgeting go hand in hand. You can’t spend more money than you have and yet, you don’t want to become a miser either. The easy way to save money and pay off debt is to create goals that you can attain. It’s about working smarter, not harder. You need to be SMART to create goals that will help you save money and pay off debt.


What is a S.M.A.R.T Goal?



S.M.A.R.T. Goals are Specific, Measurable, Attainable, Realistic and Time-Sensitive

S.M.A.R.T goals are Specific, Measurable, Attainable, Realistic and Time-Sensitive. These are the five key ingredients to any goal, and the solution to creating goals for an efficient budget.


Making a S.M.A.R.T Goal for an Efficient Budget



Making an Efficient Budget GoalTo improve your budget, start with a series of small, but smart goals. Say you want to reduce your spending, pay off your debt and become debt free. Those are worthy and important goals but they are not specific. One must first learn how to walk before they can run, so set a smaller, yet smarter, goal.

Specific: Slash spending by 10%.
Measurable: Write down total spending now, and total spending in a month after you’ve implemented your specific goal.
Attainable: By reducing variable expenses, such as groceries, gas, dining out and entertainment, you can definitely attain a 10% reduction in spending.
Realistic: This is a realistic goal because it is achievable over a time period.
Time-Sensitive: When do you plan on completing this goal? Giving yourself a month is a good amount of time to see if you reached your goal.

Smart goals can be used in every facet of your life, from dieting to budgeting to job-related and family-oriented. To increase the chances of having an efficient budget, it is important to be consistent with your smart goals and to continue to create new goals.


Making a S.M.A.R.T Goal to Increase Income



Making a Goal to Increase IncomeOnce spending has been reduced, another goal could be to increase income. This can be done by taking a side job, creating a side business, or doing overtime at your current job. To make this goal even smarter, be more specific.

Specific: Increase income by 10%.
Measureable: Compare last month’s income to this month’s income.
Attainable: Take a side job, perform freelance work, sell stuff, do overtime work, start an Etsy shop.
Realistic: It is realistic to increase your income by 10%.
Time-Sensitive: Give yourself a few months to reach this goal.

Within a few months of these smart goals, you’ve been able to reduce your spending by 10% and increase your income by 10%, providing you with an extra cash flow of 20% that can go toward paying off debt and saving money.

This article was reposted with permission from Everything Finance Blog.

top
About the Author: Tushar Mathur

Tushar Mathur has been blogging about personal finance since January 2007. He writes passionately about all personal finance topics on his blogs, Everything Finance and Start Investing Money. Tushar is a Software Developer by profession, but all he thinks about is finance and how he can help others with their money problems. Since the very beginning, he has followed the philosophy of “Pay Yourself First.”

Find Scholarships for College

Share Your Comments!

Comments

blog comments powered by Disqus
Financial Literacy on Linkedin