3 Easy Ways to Accelerate Your Debt Payoff

3 Easy Ways to Accelerate Debt Payoff

3 Easy Ways to Accelerate Debt Payoff

There are some times when we spend large sums of money on an item or a service that’s really needed, but there are also many times when we spend considerably small amounts of money in multiple areas which, on the surface, seem good and helpful, but, in reality, are costing us much more than we realize.

Here are 3 common expenditures that, if paused today, will make a significant difference in your monthly bottom line and will help you accelerate your debt payoff.

Overdraft Protection

A study conducted by the Center for Responsible Lending found that American consumers are paying over $17 Billion a year in overdraft protection fees! With an average fee of $27 a pop, consumers are paying a fortune to banks for the privilege of overdrawing their account. Even if your checking account is linked to another savings account or your credit card account, you’ll be charged, on average, a $5.00 “transfer fee” for the privilege of using your own money. That’s simply insane.

Many customers have an overdraft protection on their bank accounts and don’t even realize it. So what should you do?

First, make sure you call your bank and ask to be “opted out” of the overdraft protection. This simple means that the next time you want to purchase something with money you don’t have, you’ll be denied at the checkout, but you won’t have to pay $27 (or more) in fees!

Second, spend some time reviewing you last 60-90 days worth of charges and see what may be causing you to overdraw your account. By building a budget and setting financial boundaries for yourself, you’ll become your own overdraft protection plan! Mvelopes is a great, practical solution for those who have a hard time setting financial boundaries. Sign up for a free Mvelopes account today and start using your money on purpose.

Third, use the funds you were paying in overdraft fees to build a safety net for yourself (we call that emergency savings) or, if you already have savings for emergencies, to accelerate your debt payoff.

Trash Pick Up Service

On average, Americans will spend between $200 and $400 a year on waste removal services.  Yes, this may not be a huge expense, but it’s one that unless your county or city forces you to pay for, you should simply scrap from your budget. Instead of paying someone to do what you can easily do yourself, how about putting that seemingly small amount of money towards your smallest consumer debt, or using those $20 – $30 a month to start building your emergency reserves. Your “trash” money can become your new found treasure!

Let’s do a quick calculation. If you currently have a $2000 balance on your credit card at a 16% interest rate, your minimum payment is roughly $48. If you pay only the minimum payment, it will take you over 60 months to eliminate your debt and you’ll end up paying an additional $900+ in interest. Now let’s say you add $20 a month to your minimum payment, making it $68 a month. By doing that you just cut your term to just over 30 months and your interest paid comes down to around $500. As you can see, $20 a month can make a big difference!

Lawn Care

Americans spend a whopping $40 billion each year on lawn-care. That includes lawn treatments, water, and mowing. Why spend so much money on something you could do yourself, and for a fraction of the cost? By simply taking ownership of mowing your own yard, you can add a minimum of $20 – $40 a month towards your biggest financial need or your next financial goal.

If you are looking for creative ways to save money on lawn care, bankrate has a great article with 8 cost-cutting ideas.

As you can see, there are ways you can “find” additional dollars to advance on your financial goals. Many of us keep making multiple small, unnecessary expenditures because we simply don’t realize how big of a difference they can make long-term. Your unnecessary expenses may be different than those we listed today, but I bet if you take a good look at where your money is going, you will find at least one or two areas that you can eliminate!