Credit cards, student loans, mortgages -- no matter your sources of debt, we show you how to lower your interest rates and monthly payments.
Plus, cut costs and keep more of your money by avoiding sneaky bank fees and more.
1. ERASE DEBT
The number-one way to spend less money on debt: Get rid of it! You'll erase those costly interest charges and put that cash back in your wallet where it belongs.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Here's how to start attacking debts: Focus on the debt with the highest interest rate first. Pay the most you can afford above the minimum required each month. Once it's paid off, get in the habit of paying your new balance in full each month to avoid rebuilding the debt.
2. GET ORGANIZED
Using software to piece together your financial info from banks, credit cards and other financial institutions is a smart way to budget. It can help you identify where you can save money to put toward paying down your debt.
But you don't need to shell out the $60 to $90 for Quicken. Instead, manage your money for free at Mint.com (which is owned by Quicken's parent Intuit) or Wesabe.com.
3. TAILOR YOUR STUDENT LOAN TO FIT
Feeling pinched by student-loan payments? Ask your lender if you qualify for a graduated payment schedule (your payments start out small and increase as, presumably, your income increases). Or ask for an extended payment period, with smaller monthly payments spread over 15 or 20 years.
If you're in the Federal Direct Loan program, look into the income-contingent plan, which sets monthly payments according to your income, family size and the total amount of your loans. You get up to 25 years to repay the debt, after which the feds forgive the remainder.
4. ASK FOR A LOWER RATE
Want a lower credit-card rate? Ask for one. Studies have shown that more than half of such requests get results. You'll boost your odds of success if you have good credit and if you can provide examples of offers you've gotten from other companies.
This goes for your mortgage, too. If your interest rate is high, some banks are willing to reset the rate on your existing mortgage for a fee -- but without the cost and hassle of a full-blown refinance.
5. TAKE A HIKE
Don't stick with your bank or credit card just because it's there. Smart consumers always keep an eye out for bargains and are willing to make a move when the right deal comes along.
Finding a card with a lower interest rate could save you hundreds.
6. NEVER PAY AT THE ATM
A couple bucks here and there may not seem like a big deal. But if you're frequenting ATMs outside your bank's network, the surcharges add up quickly.
How to save: Withdraw money from an ATM that belongs to a surcharge-free network, such as Allpoint or Money Pass.
7. EARN MORE INTEREST
Parking your savings in a traditional bank savings account -- earning next-to-nothing in interest -- is as good as wasting it.
How to save: Move your savings to a reputable online bank offering high interest rates, recently between 1% and 2%.
And check out free interest-bearing online checking accounts, such as Everbank and ING Direct. They recently paid between 0.25% and 1.46%.
8. SHRINK YOUR HOME PAYMENTS
Your biggest monthly bill -- and therefore your opportunity for the biggest savings -- is your mortgage.
How to save: Consider refinancing, but crunch the numbers carefully. Take into account the bank's fees, the cost of a home appraisal and the amount of time you plan to stay in the home. Our calculator can help.
If you can demonstrate financial hardship, you may qualify for refinancing or loan modification under the federal Making Home Affordable Act.
9. RETHINK YOUR HOUSING
Owning a home -- and paying its mortgage -- may not make the best financial sense for you.
How to save: Renting eliminates your property taxes and maintenance costs, plus your utility and insurance bills are often lower. Use our calculator to see if you should rent or buy.
Get help paying your mortgage or rent by finding a roommate. Or consider house-sitting, apartment management or home-sharing with a senior citizen in need.
10. DON'T FORGET TAX BREAKS
You may not be able to reduce student-loan or mortgage payments, but Uncle Sam can alleviate some of your debt burden.
How to save: You may be able to deduct your student-loan and mortgage interest on your taxes.
And if you get a tax refund, consider using it to pay down those debts further.
11. GET A FREE CREDIT CHECKUP
A bad credit history means you'll pay hundreds of dollars in higher interest rates, plus it can influence your auto insurance rates and even your rent.
How to save: Learn what lenders see about you with the free annual credit report that you're entitled to by law. Check for errors, and then take steps to improve your credit score.
You'll have to pay to get your actual credit score, or you can go to CreditKarma.com to get TransUnion's TransRisk score for free. It isn't quite the same as the one lenders use, but it has a 97% to 98% correlation and can give you an idea of where you stand.
12. MIND THE FINE PRINT
Banks are notorious for sneaky fees. Think you've got a free checking account, for instance? Your bank may charge a fee if your balance drops below a certain level or if you download your info into a personal-finance software program. Overdraw your checking account, and you'll pay $20 to $30 a pop. That's not free.
How to save: Make sure you know your bank's rules, and keep close tabs on your spending habits to avoid getting nickel-and-dimed.
13. GET HELP
If you still can't scrape up the money to make debt payments, don't wait until you've already skipped a payment or two. Get help now to set up a strategy.
How to save: Go to aiccca.org or nfcc.org to find nonprofit credit counselors in your area. They can set up reasonable repayment plans with creditors, as well as help you create a budget that works.
MORE WAYS TO SAVE
Save Money on Investing and Financial Planning
-
A Modern Guide to Money Etiquette: Gifts, Tips, Splitting Bills and MoreWhat is modern money etiquette? The customs for splitting a restaurant check, purchasing a wedding gift, tipping and more have evolved. These guidelines can help.
-
Want to Give Money to Your Adult Children? 10 Things You Should KnowIt’s less taxing to give money to your adult children than you might think. A good plan can help you avoid certain pitfalls — and drama.
-
403(b) Contribution Limits for 2024: Good News for Teachersretirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
-
Roth IRA Contribution Limits for 2024Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How to Figure Out How Much Life Insurance You Needinsurance Instead of relying on rules of thumb, you’re better off taking a systematic approach to figuring your life insurance needs.
-
Amazon Big Deal Days Is Coming! We’ve Got All the DetailsAmazon Prime To kick off the holiday season with a bang, Amazon Big Deal Days runs Tuesday, October 8 and Wednesday, October 9.
-
How to Shop for Life Insurance in 3 Easy Stepsinsurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
-
Five Ways to Shop for a Low Mortgage RateBecoming a Homeowner Mortgage rates are high this year, but you can still find an affordable loan with these tips.
