Managing debt can be tough, especially when you’re trying to save money at the same time.
It may feel like you’re caught in a never-ending cycle of paying off what you owe while still trying to secure a stable financial future.
However, it is possible to both pay off your debt and build savings, even if it seems difficult at first.
The key is to find a balance that works for you and your financial situation.
Here’s how you can save money, even if you’re in debt.
1. Know How Much You Owe
The first step is to understand your debt. Take a moment to list out how much you owe to different people or institutions. For example, if you owe N50,000 to a friend and N80,000 for a loan, your total debt is N130,000.
Once you know your total debt, you can make a plan for paying it off while still saving.
2. Create a Budget
Start by tracking your income and expenses. Let’s say you earn N100,000 every month. Write down all your expenses, such as:
- Rent: N30,000
- Utilities: N10,000
- Food: N20,000
- Transportation: N10,000
- Entertainment: N5,000
This leaves you with N25,000 (100,000 – 30,000 – 10,000 – 20,000 – 10,000 – 5,000). This amount can be used to pay off your debt and also save.
3. Pay Off Your Debt Slowly
When you’re in debt, it’s important to focus on paying it off gradually. Set a realistic monthly payment. For example, if you can afford to pay N15,000 every month towards your debt, try not to miss a payment.
The remaining N10,000 (from the N25,000 left after expenses) can be saved.
By paying off your debt while also saving, you’re slowly improving your financial situation.
4. Start Small with Savings
Even if it’s just N5,000, start putting money aside. For example, if you save N5,000 every month, you’ll have N60,000 saved in a year. It’s important to make saving a habit.
Over time, you’ll be surprised by how much you can save, even while paying off debt.
5. Cut Down on Unnecessary Spending
To make room for both paying off your debt and saving, try cutting down on things that aren’t essential. For example, instead of eating out several times a week, you could save money by cooking at home.
Limit your entertainment expenses or find cheaper transportation options. This could free up more money for savings and paying off your debt.
6. Look for Extra Income
If possible, find ways to earn extra money. You can take on a part-time job, freelance work, or even sell items you no longer need.
For example, if you can make an extra N20,000 from a side hustle, you could use this money to pay off your debt faster or boost your savings.
Also read: Shocking Reason Banks Now Want To Fill ATMs With Money
