So, you have debt. You are not alone…I repeat you are not alone. Most people don’t start their adult lives debt free.
Don’t get discouraged. I am going to give you the steps to pay off debt quickly.
Being in debt is a huge financial burden. Having debt is keeping you from accomplishing your dreams…owning a home, having children, going back to school.
Don’t let it get you down. You can get out of debt…and quickly.
This is a process, but it is doable.
My husband and I didn’t always live a debt-free life. We have worked hard to get where we are.
We struggled just like any other couple. We were smart and owned a home and a few rental properties. We also always made sure to have an emergency fund.
But no matter how prepared we were, the Great Recession was tough. I sold real estate…need I say more? And then my husband was laid off, like tons of other people.
We were prepared with our emergency fund, but it was tough.
We made sure to stay out of debt by watching our budget. We made it through and I am here today to tell you that anyone can do it.
We started working smarter. We started a side hustle, which became a successful small business.
We have been able to accomplish other goals of retirement savings, investments, and lots of travel.
But first, we need to get you debt free.
You need to stop letting debt control your life. Taking control of your financial future can be beneficial to so many aspects of your life:
- Increase the quality of life
- More time
- Better Health
- Improve Relationships
- Reach your Goals
Now, let’s get started….
Assess
The first step to paying off debt is to assess your situation. Now is the time to write down all of your debt. Be sure to include the total debt, interest rate, terms, and minimum monthly payment due.
This step may sound easy, but most people give up at this step. Writing down and seeing how much debt you are in, can be depressing.
Budget
Now is the time to set up a budget. You can either follow Budgeting Basics or the 50/30/20 Budget Rule.
Either one of these budgets will get you on your way to pay off debt.
Negotiate Debt
Now that you have written down all your debt, let’s try and decrease the debt. I recommend calling each debt servicer. Ask for a lower interest rate on the debt. You would be surprised how many companies are willing to negotiate.
Cut Expenses
Cutting expenses is one of the most obvious ways to pay off debt. It’s one of the easiest ways to pay off debt.
I suggest taking a look at your expenses and making cuts. The obvious places to make cuts and save money are:
- Restaurants and Take-Out Food
- Buying Generic
- Packing a lunch for work
- Skipping the expensive coffees
- Cable
- Streaming Services
- Monthly Subscriptions
You can make a dent in your debts by saving on these items.
Instead, try meal planning. Meal planning is great in so many ways. Don’t over complicate things. Plan out meals that are easy to make and great for leftovers.
Debt Snowball
The Debt Snowball Solutions is the method of paying off your smallest debts first and then working your way towards your largest debts.
This way you will feel like you’re making progress quicker. This is a mindset. Accomplishing goals will help you continue on your path to paying off debt.
Earn Extra Income
A great way to pay off debt quickly is by earning extra income. This could be with a second job or overtime. You could also look into a side hustle such as starting a blog.
There are lots of opportunities for remote work from home.
You should also look into selling unwanted items in your home. I bet you got into debt by buying items you don’t need. The resale market is huge online. Give it a try.
Stop Buying New
If you are in need of something, try buying used items. This goes for cars especially. We all know how much value a car loses the minute you drive it off the lot.
You can also look at used items for clothing, especially for children. They grow so fast, why would you even buy new stuff?
Create a Challenge
Create a challenge for your family. Challenge yourself to not get takeout for a month. Challenge yourself to only buy generic for a month.
Another challenge that we do in my household is the freezer challenge. Challenge yourself to prepare all your meals from your freezer. We all have a freezer full of food that we never make. Find a recipe to use up what you already have.
You can do this with your pantry also. This will encourage you to use up items that you rarely use or that are about to expire.
Stop Keeping up with the Joneses
We all get swept away by social media. All the big vacations. The fancy restaurants.
Stop pretending that you can afford to do these things. Instead, focus on what you can afford to do. Things that fit into your budget.
Invite your friends over for game night. Have a potluck dinner. Restaurants can be expensive…especially the drinks. Having a get together at you house can save you lots of money.
I bet some of your friends are trying to get out of debt also. Don’t feel ashamed that you can’t afford everything. There is nothing wrong with being frugal.
Getting out of debt is one of the smartest things that you can do for your family and your future.
Track It
Be sure to track everything. Review it monthly. See how you are doing. Have you paid off any debts.
I am not suggesting that you don’t have any fun. There is nothing wrong with rewarding yourself every time that you pay off a debt.
Make it a point to implement these steps. You have to start somewhere.
