Tips for Saving Money when Repaying a Loan
Repaying a loan often comes with tightening your belt and living without any luxury expenses for a while. And while most people associate that with borderline poverty, that doesn’t have to be the case. As long as you’ve taken out a responsible sum and know that you can pay it off, you should still be able to work around your new budget without sacrificing too much comfort.
In fact, you may even be able to save some money along the way. That’s right, you don’t have to end up with your account at zero when you make that last payment. If you’re careful and plan ahead, you should be able to get back on your feet relatively quickly after relaying the loan, and you can even ensure that you have a nice capital to boot.
Have a Budget
This might sound like a cliched point, but the fact is that most people don’t even bother to come up with a budget for themselves. The final result is that they end up making more or less random decisions on a daily basis, spend their money on the wrong things, and generally make their situations more difficult than they need to be.
A budget is about more than knowing where your money is going. It’s about discipline. It will allow you to organize your expenses around what really matters, and will give you the ability to view things from a top-down perspective that can significantly simplify some aspects of your financial planning.
Use Modern Tools
You don’t have to draw your budget tables by hand on pen and paper these days. In fact, you don’t even have to manually create tables in Excel. There are tons of tools out there that are designed specifically around the goal of creating a sleek, intuitive budgeting solution that prioritizes saving money. Many of them are free too – but you should still consider some premium tools if you can afford them.
Use online banking if your bank supports it. Your smartphone can place many of your accounts within an arm’s reach, and this can save you a lot of time in the long run. If you have recurring payments each month, set up an automated payment plan through the appropriate app. Each minute saved can matter quite a lot.
Talk to Your Lender
If you’re in a difficult financial situation, it can never hurt to let your lender know. Most lenders on the market will be more understanding than you’d expect. And as long as this is a one-time situation and is out of the ordinary for you, you should be able to get your conditions modified at least temporarily. And even if that doesn’t work out, at least you’ve tried – you don’t stand to lose anything from at least giving it a go.
On the other hand, if you find your financial situation suddenly improving in an unexpected manner – such as getting some extra money all of a sudden – you might also want to negotiate repaying the loan faster. This will allow you to save more money in the long run. As a general rule, if your finances suddenly improve for whatever reason, you should prioritize putting money towards repaying the loan instead of saving it away. This will set you up for a much better situation in the future, and will actually improve your long-term saving abilities.
Are You Earning as Much as You Can?
Most people would tell you that they’re pretty much at the edge of their earning abilities. But most of them would probably be wrong. You can often earn a lot more than your current situation might imply, especially if your job isn’t too demanding and leaves you with extra time to spend on other activities. A computer connected to the internet is all you really need to get started these days.
You don’t even need to have any special skills. Some people out there are looking to hire for positions like virtual assistants, which don’t require a lot of expertise and can be done at a leisurely pace. The only requirement in some of these cases is constant availability. Depending on your current living situation, if you can afford the time to do that, you should definitely consider it as an option.
Remember that this won’t last forever. Everything you’re doing right now is a temporary measure to increase your saving capabilities while you’re still repaying your loan. When you’re done paying it off, you won’t have to deal with those limitations anymore. But you’ll also have a new sense for handling your finances, and you’ll be able to approach each situation with a much more responsible attitude. And hopefully, that will prevent you from getting in more trouble in the future.