Want to learn how to save money? You’re not alone. An overwhelming number of Americans want to learn more about managing their finances, according to a recent Wells Fargo survey.
“One way to manage debt is to pay it down sooner,” says Gary Korotzer, who leads the Wells Fargo Consumer Credit Solutions Marketing team. “You can save on interest over time and on the total cost of borrowing.”
Korotzer offers these tips to save money by paying off debt sooner:
• Pay off debt sooner and save significantly on interest by paying more than the minimum each month on loans. Also, try paying half your monthly bill every two weeks instead of the full amount monthly; you’ll make one extra payment over the course of a year — and you could pay your debt off sooner. Ask if your lender applies these partial payments to your principal.
• Prioritize paying off loans with the highest interest rate first.
• Stay on top of debt by setting up automatic transfers — simply select the date, the amount, and the debt you’d like to pay off.
• Bank with a responsible lender that gives you options for paying down debt on terms better for your bottom line. For example, Wells Fargo offers consumers options that could shorten the length of loans, such as refinancing and debt consolidation. There are many different ways to consolidate debt, so talk to your bank about your options.
• Reduce your overall monthly expenses by lowering the rate of your current loans. If your credit score has improved or if overall interest rates have gone down since applying for a particular loan, you may be able to lower the rate of your auto, home, personal, or student loans or your credit cards. Consider any fees that might be associated with refinancing.
• Be savvy about credit. Check all three national credit bureaus annually to verify there are no errors. Don’t worry; requesting your reports won’t affect your credit score.
• Know your limits. Being close to or maxing out your credit limits may negatively impact your credit score. Keep balances low on credit cards and other revolving accounts; keeping your balance below 30 percent of your total available credit may improve your credit score. Always pay on time, and more than the minimum due, if possible.
• Use free educational resources, such as Wells Fargo’s newly redesigned Smarter Credit Center (www.wellsfargo.com/smarter_credit) to help you make responsible financial decisions. The site offers interactive features that explain key credit concepts, such as building credit, improving or rebuilding credit, taking charge of existing debt and practicing good credit habits. The redesign is more mobile friendly, letting you learn even when you’re on the go.
Getting better money management skills can help you lower your monthly expenses on big ticket items like loan repayment and reduce the overall cost of your debt over time.