#YoungMoney: Cutting Debt, Creating Savings

By Billy Montgomery

As many students enter college, they get saddled down with credit cards which, at the time, seem like a good idea.  After all, temporary “free” money and the opportunity to establish a credit history sounds like a decent plan to any 18-year-old.  However, without a proper understanding the strategy can easily be abused and when you graduate, you’ll have a diploma in one hand and a stack of debt on your back.

Here are a few tips to assist you with your debt elimination/savings increase plan.

Make a Monthly Budget and Live by It

Budgeting takes discipline but it is not impossible no matter how much or little you make.  Budgets are designed to give you some control over what you spend.  While an annual budget is ideal, a monthly budget can be a great start toward making sound decisions on how to spend and save your money.
Pay Off Debts Smallest to Largest, Regardless of Interest Rates

Compile all of your bills, debts and monthly spending in one area and organize your debt from the smallest to the largest, by the dollar amount. Start paying off one bill at a time, and as you eliminate the owed balances, you’ll pick up momentum to go after the larger bills.
Get Rid Of What You’re Not Using

Aside from debt, it is easy to accumulate extra “stuff” during those college years and even afterwards.  Go through the closet, the dressers, and the suitcases and take a really good look around your room and see what you can get rid of.  Now, when I mention get rid of, I am really talking about things you can donate or even sell.  Remember, one person’s old, can be someone else’s new.

Happy Shedding.

Billy Montgomery is a professor of journalism at Roosevelt University.


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