Tips, advice, and the latest news from the savings world.
Are you struggling with credit card debt? If so, you’re not alone. Paying off credit cards and other higher interest debt is one of the most common goals that people try to save for. Unfortunately, having to pay off a large amount of debt with ridiculously high interest rates can make you feel hopeless, especially if your budget is already stretched. But it turns out that you don’t necessarily need to make huge sacrifices to become debt free much sooner than you may have thought was possible.
Let’s take a look at an example. Suppose you have 4 credit cards. One has a balance of $1,800 at 19.8%. The second has a balance of 1,500 at 16.99%. The third has a $1,100 balance at 16.7%. The last has a balance of $1,000 at 5.9%. If you just make the minimum payments, it would take over 30 years to pay all that off! Sounds pretty discouraging for someone on a tight budget, huh?
July 23, 2012
By Lila Quintiliani, AFC®
Military Saves Assistant Coordinator
To many people, a budget seems very much like a restrictive diet, with all the negative implications involved. People don’t want to make what seems like unpleasant sacrifices in the here and now just to ensure a comfortable, but nebulous, future. But I like to flip that notion on its head: I like to think about what I’d specifically like to accomplish (Set a Goal!) and then what I am willing to give up to get there (Make a Plan). It’s a delicate balancing act, but it’s one that most successful savers have learned to do, whether consciously or not.
Here is my own personal list of things I am willing to give up (and some I’m not!) in order to build up our new car fund: