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How to Save Cash and Pay Down Your Debt

If you are looking for a 'secret magic formula' to solve your financial problems or a quick ‘money making machine’ to pay off your debt in the next ten minutes, I will say you better skip this blog post.

However, if you are looking for some tried and tested formula to save money based on real-life experiences, then this is the perfect post you must not miss out.

Pay off your mortgage

Education, home, and car mortgages usually take away a big piece of your earning. In the first few years, the monthly premium that you pay towards your debt comprises of 80-90 percent of interest and 20-10 of the principal amount. How to get rid of the mortgage quickly?

Build up wealth by investing in some systematic investment plans (SIPs) or stocks. Which stock is right for me? Anyone can buy and sell stock, but few only make the profit and grow their wealth. I also encountered these catch-22 situations when I thought of getting started with stock trading a few years ago, but thankfully Motley Fool Offers did wonders for me. After five years, I sold out half of my stocks and the value helped me to offload part of my home mortgage principal amount. So far, stock earning has enabled me to curtail my premium-paying term from 20 years to 18 years.

Pay off those credit cards

Try not to extend your credit card bill to the next month. In brief, pay the whole amount on the due date rather than paying the minimum balance and getting the rest of the amount forwarded to the next billing cycle. Your card issuer levies a high rate of interest on the balance amount. Moreover, if you convert some amount into EMIs (monthly payments), the bank will also add some processing fee in the beginning, and then some recurring tax as service charge is bound to feature with every installment.

Reduce your phone, cable TV and Internet bill

Instead of taking standalone plans for your phone, cable TV and broadband connection, go for an inclusive package with cable, Internet and national calls included. Look for the most cost-effective package. You will be amazed at how you can reduce your phone bill. Change your approach of communication. Why talk to a friend over the phone, Facebook, email or Skype who lives a stone's throw away from you? Take time out and pay a visit. Your friend will be happier to meet you in person rather than on virtual network.

Plan for a Emergency Fund

Life is full of uncertainties and surprises. Be prepared to accept whatever life has to throw at you by keeping aside some fund every month to avoid getting trapped in unexpected debt. Maintain a diversified group of the investment portfolio. Get some excellent health and life insurance cover to cope with healthcare bills. Go with some fixed-deposit schemes with your bank, which you can access anytime. To make sure the premium you pay towards insurance doesn’t eat away your income, buy stocks of some trusted companies. Motley Fool Deals help you with the selection of stocks. The dividends can help you cope with the premium expenses without fail.

To get access to practical money saving instruments, visit the dedicated Motley Fool coupons and cashback page .
Hope you found the finance and debt management tips useful. Don’t miss to share this information with someone who you cared about. Sharing is caring!

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