You have come to the right place if you want to get out of debt! We use to be in over $75,000 in credit card debt alone, not to mention the mortgage and car payments on top of it. If anyone knows debt, we do!
Being in debt can be very emotional, with feelings that you have the weight of the world on your shoulders. The bank owns you, it may feel like. The debt ball and chain has a strong hold on your footing. I understand, I’ve been there.
How would it feel to be free of all this debt? To get the control back in your life so that you can have some extra money to do things with, rather than the bank always being there demanding every red cent that you have. It’s time to take back your financial freedom. It’s time to take these 8 steps and get yourself out of debt.
Trust me, it’s worth it being debt free. You have more options, you can take more vacations and you can ultimately plan to live a great life in retirement rather than slaving away well past retirement age.
Here are the steps you need to take…
You Need to Create a Budget
You need to meticulously lay out on paper the money you have coming in (Income) and the money going out (Expenses). Please download my Free Budget Worksheet and take some time and plug in all of your income and expenses. This will clearly show you where all your money is going.
This is absolutely a critical step in getting out of debt. When we were in debt I remember like it was yesterday the time and place that we realized how deep of debt we were in. We knew we were in debt, but we never added it all up. We were sitting in a parking lot at a restaurant of all places, and just started to add the bills up in our head. When we reached $75,000 we stopped and said, we have to do something, we have to change.
It was at that point that we had a turning point in life. We went back home and plugged in all of our income and all of our expenses and it was clear where our money was going.
Once you have all these numbers plugged in, then you begin the process of taking every single expense and justifying it. Which leads to the next step.
Cut back on your Spending (Expenses)
The reason why you are in debt, is simply because you have been living beyond your means for too long. Don’t make excuses either! You are only hurting yourself here. You are spending more than your bringing in. Simple as that.
So you need to take your newly created budget, look at every single expense and determine if you absolutely need to spend that money. If there is no option other than to spend the money, perhaps there is an alternative that costs less. Look at all options.
Stop Adding To Your Debt
So you figured out your budget and you are critiquing your expenses, but here is the key to all of this. Stop adding to your debt by continuing to use your credit cards and other money that you don’t have. Stop buying things that you don’t need in order to get deeper in debt.
This will be hard to do I know, but the best way to stop doing this is to prevent it from even being possible. What do you mean Drew?
- You can cancel your credit cards.
- You can tell your bank to freeze your credit card from spending.
- You can ask your bank to lower you credit limit.
If you are addicted to spending, then don’t get yourself in situations where you feel weak and can’t help but to spend. For example, if you can’t help to buy clothes, then stay away from malls and department stores so you don’t get tempted.
Here are some reasources that could come in handy:
- 53 Ways to do on a No Spend No Money Weekend
- 25 Awesome Freebies You Should Be Getting Now
- 10 Reasons Why You’re Broke and Have No Money
Earn Extra Money
Easier said than done Drew! If you missed my post a few days ago, you will want to take a look at it because I list out over 100 ways to earn some extra money on the side. You have to hustle if you ever want to get ahead. The opportunities exist, you just have to go out and cease that opportunity for yourself.
I’m not talking about going out and getting a second job at night, but truly side gigs and hustles where you can make some extra money on your own time. Here are some additional posts that might come in handy:
- 13 Online Survey Sites that will Pay You Extra Money
- My Epic List of 100+ Top Ways to Earn Extra Money
- 8 Ways to Rent Your Stuff and Make Extra Income on the Side
- How to Start A Blog in 4 Simple Steps and Earn Extra Income
- 9 Odd Ways to Make some Extra Money – Even Sleeping or Selling Poop
- 6 Ways to Earn some Extra Income on the Side
- How I Make Money Mystery Shopping
- Ibotta App Review – Get Cash Back at the Grocery Store
Sell Some Of Your Stuff
In addition to earning more money, you can look around your place and find some things that you can sell and make some extra cash. Whatever you make from the things you sell, you should put 100% of it towards your debt. If I wouldn’t had suggested that you go sell some things, then you wouldn’t have had the money anyways, so just put it towards debt.
Maybe in the process you could consider adopting a Minimalist Lifestyle.
Here are some places that you can list your items for sale to make money:
Pay More Than The Minimum
If you are only paying the minimum on a credit card, you will be forever in debt. You have to force yourself and push your limits on paying more than just the minimum if you are serious about getting out of debt. Every little bit of extra money should be put toward that debt. The more you put toward it, the sooner it will be paid off.
Also, you should always pay the highest interest card off first. There is no use paying off your $20,000 student loan first with an interest rate of 3% when you have a credit card with a balance $20,000 at 24.9% interest.
Automate Your Debt Payments
Just like how we automate the “Bucketing” of money in our savings, we need to automate our payments to our debt as well. When you put your debt snowball on auto pilot, you make consistent progress on your debt pay down without getting distracted. You set the preference to pay the bill regularly and then forget it. To much surprise, you will check in on occasion and realize your are paying more off than you originally thought.
While you are automating, as mentioned above, seek out other ways to throw additional money on top of the automated pay offs.
Stay Laser Focused On Your Debt Payoff
Paying off large amounts of debt is not easy. But not much in life is easy to do if it’s worth doing to begin with. THIS is worth doing! To be free of the financial burden of debt. To be relieved that the bank is not sending you another statement that you must pay or else face the debt collectors.
It felt like it didn’t take much to get into $75,000 in debt and it wasn’t an easy road to get out of it. Once we crossed that finish line and paid ever red cent back to the banks, we were finally free! That’s where you need to get. Financial Freedom awaits you! Go out there a cease it!
What is your debt free story that you can share with our readers? Were you proud when you paid it all off? Were you relieved?