Do you have $5,000 or more in debt? Here’s how $5 a day could make a huge difference

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With a little creativity, it’s probably possible to cut your budget by $5 a day.

Key points

  • Setting aside a little money each day to pay off your debts can save you thousands of dollars.
  • It is possible to reduce your expenses without depriving yourself.

A survey of stress in America conducted by the American Psychological Association (APA) indicates that money is the number one cause of stress for many of us. And stress isn’t just uncomfortable. Stress can lead to a host of chronic health issues and impact personal relationships.

Here’s the problem with money stress: Anxiety can keep us from seeing things clearly. It’s easy to get discouraged when you’re heavily in debt, but there’s no reason to lose hope.

As someone who got into so much debt that I thought I would never find the way out, I’m here to tell you that you can do it.

One bite at a time

Whenever I believe I’m stuck in an impossible situation, I come back to the words of Nobel Peace Prize winner Desmond Tutu. “There’s only one way to eat an elephant: a little at a time.”

In other words, everything in life can seem overwhelming (or impossible). But no matter how big the problem we face, the best way to tackle it is to tackle it bit by bit.

That “I’m not going anywhere” feeling

Let’s say you owe $5,000 on three different credit cards, for a total of $15,000. The average interest rate you pay is 17%. You are currently making the minimum payment on each card. At this rate – if you charge nothing else to any of the cards – the debt will be paid off in 63 months – over five years. The total interest you will pay will be $7,719.

I tell you this not to discourage you but to let you know how $5 a day can change the whole scenario, giving you a greater sense of control.

$5 per day

Spending $5 a day means you’ll have an extra $150 a month to pay off your debts. As simple as it sounds, here’s how an extra $150 a month can help:

  1. Divide the $150 between the three credit cards by making an additional payment of $50 to each each month.
  2. Instead of 63 months, the three cards will be reimbursed in 39 months (two years, three months).
  3. Rather than paying $7,720 in interest, you will only pay $4,504.

If 39 months always seems like an eternity, focusing on one card at a time is okay. By sending the entire additional $150 to a card each month, it will only take 23 months to pay off the first card. Then you can focus on the next debt.

When $5 Looks Like a Fortune

The idea of ​​an extra $150 per month may seem impossible. In fact, the thought of finding $5 a day can seem daunting. If so, run through this list of ways to do just that. There may be one or two that have not come to mind.

Have a garage sale

I don’t like visiting garage sales, but man, I love hosting one. It allows me to go through all the rooms in my house and get rid of what I no longer use. Once I’ve decided what to sell, I borrow boards and carefully organize things into categories. I have a theory that some people will linger longer if everything is tidy. Either way, I usually earn between $300 and $400 on sales, enough to cover two months of additional payments.

Buy generic

It took me years to realize how much I love generic foods. Now that I’ve taken the plunge, there are generics that I like a lot more than the brand name. According to Consumer Reports, most generic brands are as tasty as the “big names” but cost 20% to 25% less.

Home comparator

I don’t like shopping and looking for sales is not my thing. Shopping apps like Flipp make shopping easier by showing me which stores in my area have the best deals on what I’m looking for.

Rethink your morning drink

I refuse to be the person to tell you to ditch your morning latte because, frankly, if I ever commit a serious crime, it’s probably going to be due to a lack of caffeine. That said, buying a good coffee maker probably saves me at least $500 a year. Insider tip: Have fun finding a small coffee company that makes premium java. I am currently obsessed with Parish Coffee in Louisiana. Now that I can make a great cup of coffee (or a latte), I don’t think anyone else’s coffee is as good. The cost per pound is a little higher than what I would pay at a grocery store, but knowing that my coffee at home is better than any drive-thru saves me a lot.

Check your subscriptions

If you subscribe to a premium channel to watch a specific show, cancel the subscription after the show ends. I know many small subscriptions only cost $5 or $6 a month, but every little bit counts. While you’re at it, make sure you still want all your other subscriptions, including health and wellness boxes, newspapers, or satellite radio in a rarely driven car.

Carpool or buy a monthly pass

You can save on the high cost of gas by carpooling or buying a monthly transit pass. At the very least, download an app like Gas Guru or GasBuddy to help you find the gas station with the lowest prices near you.

Deprivation is no fun, and cutting off everything you love is likely to make you feel more stressed than less. I can tell you that when I got rid of my debts, I avoided big trips. Rather than spend $5,000 on a sensational vacation, I spent $1,500 on a more modest trip. It was $3,500 more to spend on debt.

While these suggestions might be helpful, you’ll likely find even better ideas that fit your lifestyle and spending habits. Regardless of how you find the extra cash, remember that it’s okay to pay off $5 debt at a time.

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