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With one in three Americans having difficulty paying their everyday bills, you’re not alone if you’re struggling to figure out how to make your bill payments. It can be challenging to know how to pay down your debt while still paying for everyday items and utilities.

The important thing is not to get frustrated or angry when looking for ways to pay your bills. Not everyone has a natural knack for money management skills, but you can learn how to effectively pay your bills every month with a bit of research.

This guide will discuss the top nine strategies for paying your bills each month while saving money.

1. Create a Budget

One of the first things you should do is create a monthly budget. Your budget is your plan or outline for every single dollar you have. It will give you financial freedom and decrease your financial stress.

If you receive a regular paycheck each month or every two weeks, you need to figure out your after-tax income. This is the amount you’d receive before any automatic deductions happen, like for health insurance or a 401(k) plan.

A solid monthly budget needs to include all of your needs and some of your wants. Some tips of how to effectively budget money include:

Allow around 50% of your monthly income for your needs
Commit about 20% for debt and savings repayment
Leave approximately 30% for your wants

There are a few different budgeting plans you can employ, such as zero-based budgeting. This is when you allocate all of your income to savings, debt payments, and expenses. At the end of the month, your goal is that your income minus all your expenses equals zero.

One tactic to take is to automate your payments as much as possible with online bill payments. That way, there’s little effort on your part. Another good idea is to have an online support group or accountability partner to keep you in check.

Keep Track of Your Progress

Record your spending each month with a bill payment calendar or bill payment tracker. This ensures you’re staying on track for your spending each month and not missing any expenses.

Create a spreadsheet or use another debt management tool to track your progress. You’ll want to monitor the following items:

Payment due dates
Remaining balances
Payments that you’ve made
Annual fees
Interest rates

Having all this information in one location will help you determine which debt you want to tackle first. You can also see how you progress over time paying down your debt. This will boost your motivation.

If you have multiple debts, pay attention to when the payments are due. Payment history and making on-time payments are essential components of credit scores. Missing one payment can result in your score lowering.

You can revisit your budget as often as you need to. Your priorities, income, and expenses can change over time. You need to adjust your budget accordingly, but always have one.

2. Stop Using Your Credit Cards

If your credit card bill payment is one area you’re struggling to pay down, one of the first steps you should take is to stop using your credit cards. It’s impossible to get a handle on your debt if you keep increasing the amount you owe.

If you keep using your credit cards, you’ll pay more in interest. This will cost you additional money. It’ll also make it more challenging to pay off your outstanding balances.

One method you can employ is switching to using your debit card or cash only for purchase. Pay close attention to how much money you have in your account so you don’t overdraw. This helps ensure that you don’t spend more money on your credit cards than you can afford to pay off.

Once you pay off your credit cards, you shouldn’t close the account. Your first thought might be that closing a paid-off card will help your credit, but it typically doesn’t.

Having a closed credit card account could negatively affect your credit utilization ratio since it lowers the amount of available credit you have. It could also alter your credit history’s length. These two items are essential components in your credit score calculation.

However, one thing to keep in mind is if your credit card has annual fees. If you don’t have enough money to pay them each year, check with your credit card company to get a different credit card with lower or zero fees.

3. Cut Your Monthly Expenses

After you create your monthly budget, look at where you’re spending money. Determine which purchases are nonessential and if you can eliminate them. The goal of reducing your expenses is to find additional funds to pay down your debt faster.

Some nonessential expenses include:

Clothing
Eating takeout
Movies
Organic groceries

That’s not to say you need to eliminate all nonessential expenses. A budget doesn’t mean you can’t enjoy your life.

Look for ways you can reduce the cost of nonessential expenses. This could include shopping secondhand for clothing items or eating out once a week. You could also negotiate your internet package to get a lower rate at a slower speed.

If you want to get out of debt quickly, you’ll have to make some difficult decisions when it comes to cutting expenses. What you decide to cut or scale back on varies from person to person.

Once you’ve cut back on things that you could live without, look at how to save money on your recurring and essential monthly purchases. This can include your monthly internet plan, as we talked about earlier. Scour the internet for coupons, deals, or bargains on items you usually buy to save money.

4. Negotiate Interest Rates

Not only do you want to make more than the minimum payments on your bills and outstanding debt, but you should also look for ways to pay less interest. Some credit cards have high-interest rates. You should approach your lender or creditor to see if you can negotiate a lower interest rate.

When you open an account, your interest rate is based on your credit score at that time. If your income or credit has improved since then, and you have a good record of making payments, the company might change your interest rate.

To prepare for the call, gather all information that shows how your credit score or income has improved. You’ll also need documents that show you have a good track record of making consistent payments.

The worst the company could do is say no. If they do, ask if you can have a temporary reduction to give yourself some breathing room. Any reduction will save you money and help you pay off your debt faster.

5. Look Into a Debt Consolidation Loan

If you have a good credit score, you could look into a debt consolidation loan. This allows you to bundle together multiple debts into one loan. You’ll receive one monthly payment with a new interest rate.

In an ideal situation, your interest rate will be lower than your previous ones. This will help you save money each month. It can also streamline your payments, helping you stay on time for making your monthly payments.

6. Find an Effective Debt Payment Strategy

If you want to make serious progress on your debt, you need to find an effective debt payment strategy. Let’s go into more detail about some of our favorite strategies.

Debt Snowball Method

If your largest outstanding balances also have the highest interest rates, you might want to consider the debt snowball method. It could take ages to make any progress on your debt when you’re able only to pay a little bit extra each month.

With this method, you pay off your smallest outstanding balances first, even if it’s your electricity bill payment. The critical thing with this method is gaining motivation. As your smaller debts disappear, you’ll feel motivated to keep going.

Debt Avalanche Method

If you have balances in multiple areas, find out what the interest rate is on each one. Make larger payments on the outstanding account that has the highest interest rate. Don’t forget to make the minimum payment on the rest of your accounts.

Once the account with the highest balance is paid in full, move on to the next one with the next-highest rate. Repeat the same process. You can save a lot of money that you’d pay toward the interest rate with this method.

You can use the debt avalanche method on the following types of debts:

Personal loans
Credit cards
Student loans
Medical bills
Auto loans

It might take you a while to pay down your largest payment, but keep chipping away at it.

7. Increase Your Income

Cutting back on your expenses and reducing your interest rates are great ways to pay down your debt faster. However, you’ll get to the point where you’ve done everything you can to reduce your expenses.

Another avenue to pay down debt fast is by increasing your income. You can use your additional money to pay down your debt.

There are a variety of ways you can increase your income. That could include getting a raise at your current job, especially if you’re due for one. You could also explore getting a side hustle to bring in a couple extra hundred dollars a month.

Some examples of a part-time revenue stream include:

Babysitting
Driving for Lyft or Uber
Freelance writing or blogging
Garage sale
Working part-time or seasonally at a retail store
Yardwork

Once you start earning extra money, put all of it toward your debt. Since you’ve already established a liveable budget based on your current income, you don’t need any of your extra funds for your wants or needs. All of it can go into savings or debt.

8. Make Extra Payments

Make as many extra payments as you can to shorten your debt payoff time. In addition to paying off your debt faster, it can also reduce your credit utilization ratio. That improves your credit score.

Once you get the ball rolling on making extra payments, you’ll get motivated to do it as much as you can. Reducing your unnecessary expenses and increasing your income are great places to get started.

9. Use Your Credit Responsibly

Your journey isn’t done once your debt is eliminated and you’ve paid off your monthly bills. Your new goal should be to prevent debt from accumulating in the future. Since you have more tools and strategies on how to pay down debt, you’re more likely to use your credit cards more responsibly in the future.

One thing to keep in mind is to avoid using your credit cards for nonessential purchases. If you use them for a purchase, pay off whatever you spend each month so you don’t incur interest charges.

You should also check your credit report daily, even if you’re free of debt. You want to protect yourself from problems like identity theft or inaccurately reported payments.

Another thing you should prioritize is creating an emergency fund. In this fund, you’ll have cash saved that can cover surprise expenses. That way, you don’t have to use your credit card when those unexpected costs arise.

It’s recommended that you have around three to six months of expenses set aside for unforeseen needs. However, even having one month saved is a great start.

Contact Rapid Cash for Help With Your Bill Payments

Don’t lay awake at night worrying about how you’re going to make your bill payments each month. Learn practical strategies to save money and pay down your debt. There’s light at the end of the tunnel, even when you’re facing a large amount of debt.