You can get out of credit card debt, but you may need to change your approach.

Credit card debt is financial dead weight. It costs you a lot of money without offering any real benefit and can be really hard to get rid of once you get into it. Many people try to break out of the debt cycle but fail to do so, usually for one of the following reasons. If any of these apply to you, consider switching up your strategy to start seeing some real progress.

1. You're spending too much

When you're trying to pay down credit card debt, you should reduce your credit card usage to prevent your balance from growing any further. You should also reduce your spending overall to free up more cash for debt repayment. If you're spending indiscriminately without giving any thought to your credit card debt or its long-term impact on your financial security, your debt problems will likely get worse over time instead of better.

Switch to cash instead of credit cards where possible and create a budget for yourself, cutting out unnecessary expenses like dining out. Put all the extra cash you save each month toward your debt repayment until it's paid off.

2. You're only making the minimum payment

It is possible to pay off your credit card debt by making the minimum payment, but only if you don't charge any more to the card and have a decade or two to spare. It can take years to pay off your credit card debt if you're only making minimum payments, and you'll probably cost yourself thousands of dollars in the process. If you want to make real headway, you have to start paying more than just the minimum each month. 

3. You're not using balance transfer cards

Balance transfer cards are one of the best ways to pay down credit card debt because they temporarily halt your interest payments, and so stop the growth of your debt. They give you a 0% APR for six to 21 months, depending on the card. You will pay a fee to complete the transfer, often a percentage of the balance you’re transferring, and if you cannot pay it all back before the introductory period is up, your remaining balance will begin to grow at the standard APR.

Balance transfer cards are a one-time-only opportunity, so you must be serious about paying down your debt if you're going to use them. When the introductory APR period expires on a card, you can never get it back again. If you have poor credit, this option might be off the table because your application may not be approved. In that case, try the next tip instead.

4. You're not targeting one card at a time

Targeting one card at a time is your next-best option if you're unwilling or unable to open a new credit card or take out a personal loan to cover the balance. This strategy involves making the minimum payment on all your cards to avoid late fees and then putting any extra money you have toward the card with the highest interest rate. When this balance is paid off, you throw all your money at the card with the next-highest interest rate, and so on, until you're debt-free.

It takes time, but this approach will minimize the amount you pay in interest overall. You can speed things up by limiting how much you charge to your credit cards so that your balance doesn’t grow any further.

Once you're out of debt, don't go back to the bad habits that got you there in the first place. Understand the causes of your credit card debt and take steps to ensure that they don't happen again -- such as creating an emergency fund to cover unexpected expenses. 

Even if you use the above strategies, it will probably take you several months to a few years to get out of credit card debt depending on how much you’ve taken on, but don't let that discourage you. Getting rid of your credit card debt will reduce your stress, increase your financial security, and probably help your credit score, too, so it's well worth the effort.

You might be surprised about what you can learn from a close read.

You probably get at least one in the mail every month, but how well do you really understand your credit card statements? Yes, they tell you how much you owe and when you have to make a payment, but there's a lot more hidden in those pages than that. Here's a closer look at what you'll find in a typical credit card statement and where to look for certain information.

Credit card statement example

Every credit card statement is laid out a little differently, so yours might not look exactly like the one below, but you can expect to find more or less the same information in any statement, regardless of your card issuer.

Images source: Kailey Hagen.

Glossary of credit card statement terms

Here's what each of the labeled sections in the images above means.

1. Account summary

Your account summary is an overview of your credit card statement for the month. It tells you all about your monthly credit card usage and how much you owe. Yours may not include all of these things or it may list them in a slightly different order, but usually, an account summary will list:

• Account Number: This is your credit card number which you can use to identify yourself if you contact your card issuer.

• Previous Balance: Your credit card statement typically shows your last month's balance for reference.

• Payment Credits: This is how much you paid toward your credit card balance last month. If you paid the balance in full, this amount should be the same as your Previous Balance.

• Purchases: This is the total dollar amount of purchases you made with your credit card during the billing cycle.

• Balance Transfers: This is the total dollar amount of balances transferred to this credit card from another credit card during the billing cycle. Your card may not include any mention of balance transfers if the card does not permit them.

• Cash Advances: This is the total dollar amount of cash your credit card issuer advanced you during the billing cycle. Your credit card statement might not include this if your card doesn't permit cash advances.

• Fees Charged: This lists the total amount of fees you've incurred this billing cycle, including things like late fees, balance transfer fees, and cash advance fees.

• Interest Charged: If you carry a balance, this will tell you how much that balance accrued in interest over the billing cycle.

• New Balance: This is the new amount that you owe the credit card company based on your purchases, cash advances, and balance transfers from this month plus any balance you have been carrying on the card.

• Past Due Amount: If you haven't been keeping up on your credit card payments, this will tell you how much you are behind on paying.

• Credit Access Line: This is a fancy way of saying your credit card limit -- the maximum amount you can charge to your credit card.

• Available Credit: This is your credit access line minus your new balance. It's how much more you're able to charge to your credit card.

• Cash Access Line: If your card allows cash advances, this will tell you up to how much you can borrow.

• Opening/Closing Date: This tells you which dates are included in this billing cycle. Purchases before the opening date or after the closing date will appear on your previous or next credit card statement, respectively.

• Days in Billing Cycle: This tells you the number of days in your billing cycle. It will usually be around 30.

2. Credit card statement balance and payment information

The payment information section provides you with the most important information about your new balance and your monthly bill, including:

• New Balance: Though it's listed elsewhere on your credit card statement, the card issuer lists it here, too, so you can't miss it.

• Minimum Payment Due: This is the minimum amount of money you must pay to the credit card issuer this month to avoid a late payment fee.

• Payment Due Date: This is the date your payment must reach your credit card issuer by to avoid a late fee.

3. Late payment warning

The late payment warning tells you the maximum dollar amount that you could be required to pay if you don't pay your credit card bill on time. Card issuers usually don't charge you this amount for a first offense. Check your cardholder agreement for more information on late payment penalties for your first and subsequent late payments.

4. Minimum payment warning

The minimum payment warning usually includes a table that helps you understand how long it will take to pay back your balance if you make only the minimum payment. Often, that period is several years -- and that's if you don't charge any more to your card in the meantime. It may also include a comparison section showing how much faster you could pay off your balance if you paid more than the minimum. Some credit card statements also include a phone number that borrowers can call for credit counseling if they are struggling with their credit card debt.

5. Rewards summary

Your credit card statement should have a rewards summary if your card offers rewards. This section contains the following information:

• Previous Rewards Balance: This is how many rewards you had prior to this billing cycle.

• Rewards Earned This Month: This tells you how many rewards you earned during this billing cycle.

• Bonus Rewards: If your card offers bonus categories, it might break out the number of bonus rewards you earned for the month and list them here.

• Total Rewards Available: This is your new rewards balance, including any rewards you earned this billing cycle.

Visit your online credit card account or contact the card issuer by phone to see how much those rewards are worth and what you can spend them on.

6. Important changes to your account

This section highlights changes your card issuer plans to make to your account in the near future. These might be changes that apply specifically to you, like triggering a penalty APR because you've made a number of late payments, or it could be things that apply across the board to all cardholders, like an increase to the APR. 

It should tell you which of your transactions these changes will affect and when the changes will take effect. If you have any questions, you can contact your credit card issuer for more information.

7. Payment coupon

If you pay your credit card bill by mail, cut off this payment coupon and include it with your check. You must also list your payment amount on the coupon. This helps speed up the process and ensures that your payment gets applied to the right account. If you pay your credit card bill online or you have the money debited from your bank account every month, you don't have to worry about the payment coupon.

8. Account activity

The account activity section lists all the transactions you made during this billing cycle, including the date of the transaction, the merchant name, and the dollar amount. Some credit card issuers also attach a reference number to each purchase. That way, if you have questions about a purchase or you suspect you might be a victim of identity theft, you can quickly tell the card issuer which purchase you're referring to.

Those who carry a credit card balance from the previous month and those who did a balance transfer or took a cash advance will find a more detailed breakdown of the fees and interest they incurred in this section as well.

9. Fee and interest totals to date

Your credit card statement may include a brief table summarizing how much you've paid in interest and credit card fees for the year to date. Let this serve as motivation to you if you're trying to pay down your credit card debt.

10. Interest charges

The interest charges section gives a more detailed explanation of how the card issuer calculates your interest. It may have separate sections for purchases, balance transfers, and cash advances if they all have different APRs. You'll also find information on promotional APRs here, if they apply to your account, including expiration dates.

You might see symbols, like (v) or (d) after the interest charges in this section. These are a sort of mini glossary. Some of the most common terms and symbols you might see include:

• Promotional APR: This is a lower APR than the standard APR and it only lasts for a certain number of months after you open the card. It may apply to purchases, balance transfers, and cash advances, or only one or two of these.

• (v): This stands for variable. It means that the card's interest rate is tied to the prime rate or a similar benchmark that may change over time. If it does change, your interest rate may decrease or increase accordingly. The card issuer does not need to notify you about this in the Account Changes section because this relationship is outlined in your cardholder agreement.

• (d): This means your card issuer uses the Daily Balance Method to calculate your interest charges. This method totals up your actual daily balance on every day of your billing cycle and multiplies this by the daily rate, which is 1/365 of your APR.

• (a): This means your card issuer uses the Average Daily Balance Method to calculate your interest charges. This is where it takes the average balance on each day of your billing cycle, adds them up, and multiplies them by the daily rate.
  
  

Frequently asked questions about credit card statements 

Here are the answers to a few commonly asked questions about credit card statements.

How can I view my credit card statement online?

You can view your credit card statement online at any time by logging into your online credit card account and navigating to the statement information. If you've opted to receive electronic statements, your card issuer should send you an email every month when your new statement is available. It should contain all of the same information as the paper statements detailed above. 

If you prefer to get your credit card statements by mail, you can choose paper statements instead, though you may have to opt in as more and more companies are transitioning to online statements to save paper.

What happens if I pay my credit card bill before I get the statement?

You can pay your credit card bill at any time during the billing cycle, even before you receive your monthly statement. On your statement closing date, which is usually at least 21 days before your payment due date, your card issuer will calculate your interest charges for the month and your minimum payment. It also reports your payment to the credit bureaus.

If you pay your balance off before this date, your payment will reduce or eliminate your balance and give you more credit to spend in the second half of the month. Making a payment will also lower your credit utilization ratio because credit bureaus only see what the credit card issuers report once per month. When your credit card bill arrives, it should show all of your purchases for the month, plus your first payment. Your New Balance should list your remaining balance for the billing cycle.

If you pay after the statement closing date but before you actually receive your statement, you can calculate what you owe by subtracting what you already paid from the new balance on your credit card statement when it arrives.

Credit card statements admittedly aren't the most exciting reads, but there's a lot of important information packed in them. Hopefully, this guide helps you better understand yours.

Save yourself some money and get rid of your student loans faster by following these tips.

For many young people today, student loan debt is just part of the college experience -- one that often follows them for a decade or more after graduation. The best-case scenario is that it costs you money and forces you to put off some of your other financial goals for a little while. The worst case is it can ruin your credit and your financial security. 

Paying off your student loans quickly can reduce the amount of money they cost you and the amount of time they get in the way of the rest of your life. It's not always the easiest thing to do, but here are a few tips that might help you unshoulder that burden faster.

1. Choose the student loan repayment plan with the highest payment you can comfortably afford

The student loan repayment plan with the lowest monthly payment might seem like your best option because it gives you more cash to spend today. That might actually be the right choice if you qualify for student loan forgiveness programs, like Public Service Loan Forgiveness (PSLF). But if you're paying back the loan on your own, choosing a lower monthly payment could extend your loan term and end up costing you more in interest in the long run.

When you choose a student loan repayment plan with a higher monthly payment, each payment will make a bigger dent in your balance, enabling you to pay back what you owe more quickly. But make sure you choose a student loan repayment plan that you can afford. Missing monthly payments could cost you in late fees and lower your credit score. 

2. Apply for student loan forgiveness programs

If you believe you qualify for loan forgiveness, don't take any of the other steps listed here to pay your federal student loans off more quickly. This will only cost you money that the government would have forgiven on your behalf. 

However, private student loans are never eligible for forgiveness, so you can use these steps to pay them off faster.

Teachers, members of the military, and those providing a public service, like doctors, may be eligible for federal student loan forgiveness if they work in a qualifying position for a certain number of years and make a certain number of on-time payments on a qualifying repayment plan. PSLF, for example, requires that you work for a qualifying employer for 10 years, make at least 120 on-time payments, and submit an annual employment certification form in order to be eligible. If you're interested in pursuing PSLF, reach out to your loan servicer to check if your employer qualifies for the program and submit your first employer certification form to get the ball rolling.

3. Pay more than the minimum

Whenever possible, pay more than the minimum each month, but do it with care. Some lenders may apply any extra money toward your next month's payment or spread it around among all your loans, which won't have the impact you want it to. Send your extra payment with instructions to your lender telling it that you want any extra funds applied to the principal balance on your loan with the highest interest rate first. Follow up with your loan servicer later to ensure that it applied your payment correctly.

You might have to make some budget changes to free up some extra cash. You could also use year-end bonuses, tax refunds, and other windfalls, though you can't count on these to help you out every month.

4. Refinance when you can find a better interest rate

Keep an eye on student loan interest rates even after you graduate. If they drop, consider refinancing. This will slow the pace at which your balance grows so that each payment shaves more off your principal and you can pay off your loan more easily.

Only private student loan companies offer refinancing. Federal student loans do not allow this, though you can consolidate multiple federal Direct student loans into a single Direct consolidation loan if you choose. 

Private student loan companies usually do not offer the variety of repayment options that federal student loans have, but they may offer you a lower interest rate, especially if you have good or excellent credit.

5. Seek out employers that offer student loan repayment assistance.

An increasing number of employers are offering student loan repayment assistance as a benefit to entice young graduates. Each company has its own system and some may require you to work for the company for a certain number of years before you become eligible. Make sure you understand each company's policies before you apply for the job to understand what you can expect.

Don't choose a company just because it offers student loan repayment assistance. And remember that money they give you for this is still taxable, just like your regular income. Do the math -- if another company will pay you more than the one offering student loan repayment assistance, you might be better off skipping the assistance and getting the larger paychecks instead.

The above tips may require some short-term sacrifices, but remember, you're doing this to save yourself money in the long run so that you can more quickly achieve your other financial goals.

Credit plays a big part, but it's not the only deciding factor.

You want to put your best foot forward when applying for a mortgage, auto loan, or personal loan, but this can be difficult to do when you're not sure what your lender is looking for. You may know that they usually look at your credit score, but that's not the only factor that banks and other financial institutions consider when deciding whether to work with you. Here are seven that you should be aware of.

1. Your credit

Nearly all lenders look at your credit score and report because it gives them insight into how you manage borrowed money. A poor credit history indicates an increased risk of default. This scares off many lenders because there's a chance they may not get back what they lent you.

Scores range from 300 to 850 with the two most popular credit-scoring models, the FICO® Score and the VantageScore, and the higher your score, the better. Lenders don't usually disclose minimum credit scores, in part because they consider your score in conjunction with the factors below. But if you want the best chance of success, aim for a score in the 700s or 800s.

2. Your income and employment history

Lenders want to know that you will be able to pay back what you borrow, and as such, they need to see that you have sufficient and consistent income. The income requirements vary based on the amount you borrow, but typically, if you're borrowing more money, lenders will need to see a higher income to feel confident that you can keep up with the payments. 

You'll also need to be able to demonstrate steady employment. Those who only work part of the year or self-employed individuals just getting their careers started may have a harder time getting a loan than those who work year-round for an established company.

3. Your debt-to-income ratio

Closely related to your income is your debt-to-income ratio. This looks at your monthly debt obligations as a percentage of your monthly income. Lenders like to see a low debt-to-income ratio, and if your ratio is greater than 43% -- so your debt payments take up no more than 43% of your income -- most mortgage lenders won’t accept you. 

You may still be able to get a loan with a debt-to-income ratio that's more than this amount if your income is reasonably high and your credit is good, but some lenders will turn you down rather than take the risk. Work to pay down your existing debt, if you have any, and get your debt-to-income ratio down to less than 43% before applying for a mortgage.

4. Value of your collateral

Collateral is something that you agree to give to the bank if you are not able to keep up with your loan payments. Loans that involve collateral are called secured loans while those without collateral are considered unsecured loans. Secured loans usually have lower interest rates than unsecured loans because the bank has a way to recoup its money if you do not pay.

The value of your collateral will also determine in part how much you can borrow. For example, when you buy a home, you cannot borrow more than the current value of the home. That's because the bank needs the assurance that it will be able to get back all of its money if you aren't able to keep up with your payments.

5. Size of down payment

Some loans require a down payment and the size of your down payment determines how much money you need to borrow. If, for example, you are buying a car, paying more up front means you won't need to borrow as much from the bank. In some cases, you can get a loan without a down payment or with a small down payment, but understand that you'll pay more in interest over the life of the loan if you go this route.

6. Liquid assets

Lenders like to see that you have some cash in a savings or money market account, or assets that you can easily turn into cash above and beyond the money you're using for your down payment. This reassures them that even if you experience a temporary setback, like the loss of a job, you'll still be able to keep up with your payments until you get back on your feet. If you don't have much cash saved up, you may have to pay a higher interest rate.

7. Loan term

Your financial circumstances may not change that much over the course of a year or two, but over the course of 10 or more years, it's possible that your situation could change a lot. Sometimes these changes are for the better, but if they're for the worse, they could impact your ability to pay back your loan. Lenders will usually feel more comfortable about lending you money for a shorter period of time because you're more likely to be able to pay back the loan in the near future.

A shorter loan term will also save you more money because you'll pay interest for fewer years. But you'll have a higher monthly payment, and so you must weigh this when deciding which loan term is right for you.

Understanding the factors that lenders consider when evaluating loan applications can help you increase your odds of success. If you think any of the above factors may hurt your chance of approval, take steps to improve them before you apply.

You have a lot of credit scores, and they're not all the same.

It's not difficult to get a free credit score these days. And if you check your score in a few different places, you might find that the numbers don't always match up. That doesn't necessarily mean that any of them are wrong. It probably means the scores are based on different credit reports or a different scoring model. 

The truth is, if you have a loan in your name or a credit card in your wallet, you have dozens of credit scores and one isn't necessarily more correct than another. Here's a closer look at what credit scores are and why you have so many of them.

What is a credit score?

A credit score is a three-digit number that's essentially a financial grade. It's based on the information in your credit reports. These contain details of current and past credit accounts in your name, including payment history, balances, and information from public records. Everyone has three credit reports, one for each credit bureau -- Equifax, Experian, and TransUnion -- so you effectively have three credit scores for every scoring model, one corresponding to each report.

There are several credit scoring models in existence because each one weighs the factors in your credit report a little differently. The goal of credit scores is to help lenders more accurately predict how a person will handle borrowed money. Lenders want to protect themselves from losing money to borrowers who go bankrupt. Credit scoring companies constantly analyze data from millions of borrowers. If they spot new data that could help them predict risk more accurately, they might create a new credit scoring model that incorporates this information to give them better results.

FICO® Scores and VantageScores

The two most commonly used scoring models are the FICO® Score and the VantageScore. If you're going to look up your credit score, you should check one of these since lenders are most likely to look at them when checking your credit. Both FICO and VantageScores have a few different versions, but they all use the same scoring system of 300 to 850, with a higher score being better. 

They look at pretty much the same factors, though VantageScore gives a stronger weight to payment history while FICO cares more about your credit utilization ratio -- the ratio between the amount you charge to your credit cards each month and the credit you have available to you. Other factors that both scoring models consider include the average age of your credit accounts, which types of credit you have on your account (credit cards, mortgages, etc.), and how often you apply for new credit.

There might be a slight variance between what you see and what lenders see. This depends on which version of the scoring model your lender is using and which credit report the score is associated with. Your credit reports all have largely similar information, but some financial institutions may only report payments to one or two of the credit bureaus instead of all three, resulting in slightly different scores even when using the same version of the same scoring model.

Other credit scoring models

Unless a company specifies that the score it's providing you with is a FICO or VantageScore, it's probably neither. Some companies develop their own educational scores using proprietary scoring methods. These may have different scoring ranges, too, so while a 600 might not be a great FICO or VantageScore, it could be a good score in a different model. 

These educational scores aren't used by lenders, so they're not that useful if you're trying to estimate your odds of success when applying for a new loan or credit card. But they can still provide valuable information on steps you can take to improve your credit. These educational scores may come with insights on how you can improve your credit score, like making efforts to pay all your bills on time in the future. Following those tips can help improve all of your credit scores.

How to raise your credit score

You'll never know exactly which version of which credit scoring model your lender is going to look at, so you must take steps to raise all of your scores if you want the best odds of success. This sounds intimidating, but it's really not that bad when you know that all scores consider the same basic factors.

Payment history is always the most important element, so paying your bills on time is critical. Set up automatic payments or reminders for yourself if you tend to forget. Your credit utilization ratio is the other major factor in your score. Try to limit yourself to 30% or less of your credit limit each month. A higher ratio indicates a heavy reliance on credit and suggests you may not be able to handle taking on more debt without falling behind on your payments.

Limit how often you apply for new credit and be careful about closing old credit accounts, as these are both things that can negatively affect your score. Applying for new credit generates a new hard inquiry on your report, which drops your score by a few points, while closing a credit account can hurt your credit utilization ratio by bringing down the total amount of credit you have access to. 

Time may seem like an enemy because negative marks on your credit report stick around for seven to 10 years, but it can also be your friend because a consistent, responsible payment history can help your score improve. Be patient and stay committed to demonstrating your financial responsibility and your score will rise over time, regardless of the credit scoring model. 

Credit card companies set their own terms, but you get some influence over which ones apply to you.

Credit cards have their perks, but they also have their price. And that price can get very expensive if you run up a balance you can't pay back. Choosing the wrong credit card can also cost you in lost rewards and additional fees. The good news is, you can avoid many of these costs by choosing the right card and managing your money responsibly. Here are four credit card fees you don't have to pay.

1. Annual fee

There are so many rewards credit cards available today that don't charge an annual fee, you shouldn't pay for one unless you want to. In rare cases, it might be worth it -- for example, if you're paying for a premium travel credit card that offers free travel vouchers and free luggage. But you should always do the math first to calculate whether the rewards you'll earn outweigh the cost of the annual fee. If not, move on to a different card.

Read the fine print carefully when signing up for a new card. It may be that the annual fee is only free or discounted in the first year, but then a standard fee kicks in in the second year. Check the cardholder agreement to learn about the card's annual fees, including any promotional rates. 

You may be able to negotiate a reduced annual fee with your card issuer, or even eliminate it completely. But card issuers don't have to agree. If you've had the card for a long time, you can use your loyalty as leverage and threaten to switch to a different credit card if they don't comply. Be prepared to make good on that threat if your card issuer denies your request.

2. Foreign transaction fees

You can incur foreign transaction fees when you use your credit card in a foreign country. This fee is often 3% of the transaction and you'll pay it every single time you use your credit card on your trip. It's possible to rack up quite a bit if you're not aware of these fees. 

Most top travel rewards credit cards don't charge foreign transaction fees, so choose one of these cards if you're planning to travel abroad. Check the cardholder agreement on your existing credit cards if you're unsure about whether they have foreign transaction fees. Another option for getting around these fees is to rely primarily on cash while you're abroad. It's still a good idea to have a credit card for backup, though, in case there's an emergency or you run out of cash.

3. Interest

Everyone knows that if you don't run up a balance you can't pay back, you'll never pay a dime in credit card interest. However, that knowledge isn't especially useful if you already have credit card debt. In this case, you can still avoid interest payments temporarily -- and possibly forever -- if you use a balance transfer card. 

These cards have 0% introductory APRs for six to 21 months. Pay off your balance within this timeframe and you won't need to pay any more interest. Balance transfers usually have a fee attached -- often a percentage of the balance you're transferring -- but this option will probably still be more affordable than continuing to deal with the interest you are paying right now.

If you cannot pay the full balance back within the introductory APR period, your remaining balance will begin accruing interest at the standard APR unless you transfer that remaining balance to another balance transfer card. 

4. Late fees

Late payments can hurt your credit, and they also come with late fees, which can make your balance more difficult to pay back. Your card issuer may charge you up to $28 for your first late payment and up to $39 for any additional late payments. But you can easily avoid these fees by always paying your credit card bill on time. Set up automatic payments, if possible, or set reminders for yourself so you remember to pay the bill by the due date.

The only things you should have to worry about paying for are the purchases you charge to your credit card. Read through the cardholder agreement before you sign up with a new credit card and make sure you understand all the associated costs. Then, choose and use your cards responsibly so you can avoid the four fees mentioned here.

Want more money? Try these four things.

We could all use a little extra cash in our lives, especially at this time of year. Slaving away at your 9-to-5 is one way to do it, but it's not the only way. While the following four strategies won't make you rich overnight, when used consistently over time, they can help you double your money.

1. Investing

Investing is one of the best ways to grow your wealth because there's a good chance your annual rate of return will outpace inflation, gradually increasing your net worth. Plus, it doesn't require much work from you -- apart from choosing the right investments. That's not always the easiest thing to do, but there are plenty of tools out there to help new investors get started.

It is worth taking a look at index funds because they offer low fees, instant diversification, and historically strong growth. These are mutual funds that passively track a market index, like the S&P 500. You could also try a robo-advisor if you want help picking investments. They tell you how to invest your money based on your answers to a few questions, although the advice isn't as tailored as some might like.

However you decide to invest and whatever you decide to invest in, stay mindful of fees because they can eat into your profits. Check your prospectus and your broker's fee schedule to learn what fees you're paying. You also need to make sure you diversify your investments across many assets and sectors to reduce your risk of loss.

2. Use a high-yield savings account

If you have money that you don't expect to use in the next few years, investing is your best bet. But if you want to sock away some cash for your emergency fund or a large purchase, a high-yield savings account is probably a better choice. These operate just like traditional savings accounts, but offer much better interest rates. The average savings account APY is 0.09%, but some high-yield savings accounts have APYs of more than 2%.

To give you a sense of the difference that could make, consider a five-year investment of $10,000. With the average 0.09% APY, it would only be worth about $10,045 after five years. But if that same sum had a 2% APY, it would be worth nearly $11,041 after five years. That's nearly a $1,000 difference, all from switching up the type of savings account. It may still take a while to double your money in an account like this, but it'll get you there much faster than a typical savings account.

3. Start a side hustle

If you're looking to make a little extra cash in the short term, there are often seasonal jobs available during the holidays and summer months. But it's also very possible to start a side hustle and generate extra cash year-round. There are a lot of options these days. You could drive for a ridesharing company, sell things online, walk your neighbor's dogs, or teach classes in your area of expertise. Think about what you're good at and how you could best monetize it. Then, advertise your business to your family and friends to help generate customers.

Keep in mind that you don't get to keep all of your side hustle income. You owe a portion to the government. If you also had the side hustle the year before, last year's tax return should tell you how much you must pay quarterly. Otherwise, you can estimate your taxes using this worksheet.

4. Spend less to double your savings

Doubling the money in your bank account won’t necessarily require any extra work if you're willing to cut back on your spending. Comb through your budget and look for areas where you're spending more than you need to or more than is wise. Dining out, clothing, and entertainment purchases are a good place to start. 

You should also look through your subscriptions for any you're not using anymore. Check your bank and credit card statements for the past year to make sure you don't overlook the ones that renew annually or every few months. Put the money you're saving into your high-yield savings account or your brokerage account to help it grow more quickly. 

Try one or a combination of the strategies above. If you stick with them, in time you can grow and maybe even double your money.