How to Save Money While Battling Debt

By: Briana Londono, Brand Relations & Advocacy Intern

Millions of Americans are in debt. Credit card debt plagues six out of every ten Americans1, and student loan debt has accumulated to $1.5 trillion nationwide.2 Numerous other types of debt – from auto payments to mortgages – have an impact as well. These astronomically high debt levels can delay home ownership or starting a business, and put luxuries like yearly vacations and new cars well out of reach for years or even decades. Another side effect of indebtedness is an inability to do something that is necessary for every financially responsible person: putting aside money for a rainy day. When confronted with a mountain of debt – and interest rates that ensure it grows over time – many people face a stark choice between having a nest egg and making a dent in what they owe. But lack of savings is an acute national problem as well. Recent research shows nearly 40 percent of Americans would not be able to afford a sudden $400 expense.3 Given how easily such an expense could come up (an emergency medical bill, a car repair, etc.), this combination of debt and lack of savings is a ticking time bomb for many households.

saving money

While financial soundness isn’t easy to attain, and each person’s circumstances are unique, there are some important tips on how to save money while battling debt that are relevant to most people.

How to save money: 5 key tips

1. When possible, avoid minimum payments. Even high levels of credit card or student loan debt may entail relatively low minimum monthly payments. This doesn’t mean you should stick to paying them if you can afford to pay more. Of course, sometimes you face a financial setback and must keep to the minimum, but that’s all the more reason you should pay above and beyond when you have some extra money. Why? Because interest rates typically ensure your debt will keep growing even as you work toward paying it off. Make sure you keep one step ahead of those rates!

2. Consider refinancing or consolidating debt. If you’re struggling with high interest rates and/or multiples loans, you might want to look into refinancing or consolidating your loans into one with a more affordable rate that minimizes growing your mountain of debt. Affinity offers debt consolidation for a wide variety of loans, from credit cards to auto, business and home equity, as well as refinancing for mortgages. Talk to your financial institution about how you can get a better rate on whatever type of debt is weighing you down.

3. Create a budget plan. Even the thriftiest person can lose track of their spending and fail to stay within budget. That’s why everyone should have a detailed plan – whether weekly, monthly or yearly – that ensures overall spending stays within a certain limit. This involves allotting a portion of money within a given time for different purposes, such as food, clothes, rent, etc., and allowing for some discretionary spending on luxuries or recreation. But if you face a significant level of debt, what’s essential in this budget plan is allocating a certain amount of money toward making regular payments that stay ahead of interest rates.

4. Automatically put money in your savings account. If you get paid through direct deposit, ask your employer to deposit a portion of your money every payday into a savings account, kept separate from the checking account you use for your expenses. This has the benefit of putting some of your money out of mind when it comes to creating your budget so you will always have something to fall back on if finances become strained. This savings can also be put aside to pay off a designated loan or bill that serves as a major part of your overall debt. If you’re not on direct deposit you can deposit the money yourself, but it helps when it happens automatically, so you don’t consider that money part of your regular budget and become tempted to dip into your savings.

5. If it’s convenient, get a side hustle. The “gig” economy offers plenty of opportunities to make some extra money these days, even while working a full-time job. You can monetize things you never thought possible, like your car (driving for a ride-hailing app) or your house (renting out a spare bedroom to travelers who don’t want to pay for a hotel). You can also turn a hobby – such as writing or graphic design – into a source of extra income as a freelancer by way of online platforms. Of course, side gigs are time consuming, and people with many existing responsibilities shouldn’t overwork themselves. But if you’re willing and able, it’s something to consider as a way of tackling your debt while saving money.

Debt can seem all-consuming and impossible to address, as can saving money under tight financial conditions. But if you follow these tips, you might be able to make a different faster and less painfully than you imagined.

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This information is for informational purposes only and is intended to provide general guidance and does not constitute legal, tax, or financial advice. Each person’s circumstances are different and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and/or legal counsel to discuss your specific needs before making any financial or other commitments regarding the matters related to your condition are made.   - See more at:

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