This is part four of our five-part series as part of America Saves Week (April 7-11, 2025). For more information on this topic, as well as others, please visit AmericaSavesWeek.org.
We typically don’t think about making payments as a way of saving. Well, it depends on what those payments are going toward.
Debt can come about in many different ways. Sometimes, the debt originates from our own doing, such as too many non-essential purchases. Other times, it can be from large payments, such as those from student loans, medical bills and car bills.
But when we make payments to lower our debt, we’re actually making progress toward our savings. How is that? Lower debt = more room in your budget. And, more room in your budget allows for more savings.
It’s typically good to focus on one debt at a time. Address it. Get it taken care of and then move on to the next debt you may be facing. If you can, make extra payments, pay more than the minimum each month and keep an eye on your weekly and monthly expenses. Is there anything you can do without, whether it be temporarily or permanently? If so, that extra cash flow can be used to reduce your debt.
And when you do make these debt payments, your savings will reap the benefits.