Did you know that the average American Household has over $15,000 in credit card debt and over $50,000 in student loan debt? That’s insane! And we aren’t even counting auto loan debt or mortgage debt! I don’t know about you, but I do not want to spend the rest of my life paying other people!
My husband and I started working toward getting out of debt early in our marriage. And we were kicking butt! Then, our house was hit by a flood. We were evacuated from our own doorstep with our two year old, and i was 3 months pregnant. Not fun. In one night, our home was trashed, our car totaled by water, and every piece of furniture we owned was ruined. But man, I’m thankful we had so much paid off before we were hit with that disaster!
So back we are at square one on our fighting off debt journey. These are the steps we used before and will use again to get out of debt fast. We are going all out this year, and hope to be debt free (other than our home) before Christmas 2018! Join us on the journey!
1. Buy “Total Money Makeover” by Dave Ramsey.
This book has so many insights into becoming debt free. It truly changed my life and the financial well being of my family! You can find it for pretty cheap on Amazon here. Reading 100 blog posts on getting out of debt won’t give you the insight that you will get from this book. Buy it. Read it. Live it. You will not regret this purchase
2. Make a legit budget.
There are several options for budgeting. I like to write things down with a pen and paper first. You may be more inclined to use an online budget tool. I recommend mint.com or everydollar.com (disclosure: I am NOT affiliated with either of these companies. I make no money if you sign up with them. I just love these tools, and I think you will, too). These are both free options that will help you get started.
UPDATE: I have created an awesome budget template for you to use! It’s also FREE to download. You can check out the instructions on this budgeting post.
You need to see where your money is going. I’m a werido, and I enjoy budgeting. It’s fun for me. When you actually see the numbers in front of you, it helps you stay on track. When I say LEGIT Budget, I mean it. Don’t say, “Oh, I’ll budget $100 for groceries this month.” You know darn well it will cost you more than that. Be realistic.
3. Cut out the crap.
Really though. Do you NEED a Frappuccino from Starbucks every morning? I recommend reviewing your bank and credit card statements to identify areas of unnecessary spending. Remember…this is only for a season. As Dave Ramsey says “you have to live like no one else now, so you can really live like no one else later.” Consider reducing your cable network…you may even need to downgrade your vehicle for a few months. It will be worth the sacrifices now. TRUST ME!
4. Get on track with your spouse.
Getting out of debt will not be quick or easy if only one of you is trying. It’s a group effort. It will take sacrifices that are much easier together.
There is no need to pay full price for groceries! Check out this post on couponing for beginners to start saving money asap. It’s not complicated or time consuming. Taking time to prepare before you go shopping can save you thousands of dollars each year!
6. Eat at Home.
Going out to eat is SOOOO much more expensive than cooking at home. I know it’s boring, and sometimes the last thing you want to do at the end of the day, but it will help you stay within your budget and pay off debt faster. (It’ll also keep you healthier and skinnier, so there’s that added benefit!)
7. Post your debt snowball in plain sight.
After you make a visual representation of your debt, put it on the fridge, or the bathroom mirror, or somewhere you will see it daily. It will help you stay motivated and on track. It’s okay if you want to hide it when your friends come over, but then again…it could be the motivation they need to take charge of their own finances! You can download my free budget printable here. It includes a debt snowball worksheet!
8. Make money while you spend money.
Spending money is inevitable. You have to do it in order to live. So why not earn some cash back while you’re doing it? Check out this post for some tips and tricks. I use cash back apps on groceries, as one example. I just scan my receipt and get rebates for stuff I would have purchased anyway. I save it all up, and cash out in November for Christmas shopping. Win-Win!
9. Live within your means!
If you want to get out of debt, this is not the time to try to impress your colleagues with your new Kate Spade Purse. Suck it up for a little while, and use what you already have. Remember, you’ll be out of debt soon and able to buy any purse you want and fill it with all your money!
This can get a little painful here…maybe you need to trade in that new gas-guzzling truck for a smaller, cheaper, car. Do whatever it takes to get that debt out of your life!
10. Get Organized.
One tip that has helped me is the Envelope System! I put CASH in envelopes for certain expenses: gasoline, Groceries, eating out, etc. I put the amount that I have budgeted for each of these categories into their envelopes. It helps me to stay on track. Sometimes, numbers can get away from us when we are swiping that debit card! You can use plain envelopes, or you can buy super cute ones on etsy like these:
After the first month, this won’t be fun any more. Keep reading your book. Keep reminding yourself of why you want to be debt free. Join Facebook pages of like-minded people with the same goals. It’s going to be worth all of this sacrifice when you are living debt free!
You CAN do this. I’m doing it right along with you. Don’t give up. It will be worth it!