Budgeting Expert Says Making This Simple Move With ‘Unexpected Money’ Will Get You Out Of Debt Fast
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Paying off debt isn’t as hard as people believe.
Budgeting and planning are the keys. Unfortunately, millions of people are terrible at both.
Besides getting better at budgeting and planning, Tiffany “The Budgetnista” Aliche believes there’s another way to get out of debt faster.
The personal finance expert and author explains that people need to start paying closer attention to two different types of “unexpected money.”
What is Unexpected Money?
“Unexpected money is any money that you were expecting to spend but did not, or money you were not expecting to receive but did,” Aliche said at the OneUnited OneTransaction conference.
Aliche said there are two different types of “unexpected money.”
Here’s an example of the first type from Aliche’s talk, transcribed by Business Insider.
“Aliche gave the example of buying a $50 item, only to find out when you go to the register that it’s half off. Instead of grabbing a second item, so you get two for the price of one, put that extra $25 toward your debt. That $25 is unexpected money you didn’t plan to have.
Or maybe you go out with a friend, and at the end of the meal, they grab the check. That’s $30 of unexpected money.
“You were planning to spend that $30 — $30 was gone in your head,” Aliche said. “Let it really be gone, but put it toward your debt. And if you’re debt-free, put it toward your savings.”
The second type of money that a person didn’t know was coming at all, or at least a person who wasn’t positive would end up in their possession.
This money includes a work bonus, unexpected raise, birthday or holiday money, or even fantasy football winnings.
“Even your tax refund check could be unexpected money,” Aliche said. “Even though you’re kind of expecting it, it’s money outside of your normal job.”
While Aliche’s suggestions about unexpected money are all beneficial, the finance expert gave one piece of advice that’s really the key to putting the money in the right place.
Business Insider explains that “Aliche does her best to reallocate this money within one hour of getting it.”
That’s the REAL nugget of advice. DON’T give yourself time to spend the money or talk yourself out of using it to pay off debt or make plans to use the extra cash on dinner or pointless purchases.
IMMEDIATELY put the money towards debt.
Check out more from Tiffany “The Budgetnista” Aliche on her website.