What to do when you decide to get out of debt
Are you ready to get out of debt, but just aren’t sure where to start? I have been there! Let’s me start off by telling you that you can do it! One of my favorite posts I ever wrote (and one of my most popular) was how I got out of $43,000 of debt. Here’s what started our journey- we were making the most money we ever had in our young careers, but it all seemed to be disappearing to bills. I was frustrated- I wanted to have fun with my money not just have it run through my fingers like sand (I’m sure you’ve felt like that before too).
I started pinning articles on Pinterest on how to be debt free. One led me to an article by Dave Ramsey; I checked his book The Total Money Makeover out of the library and read it and got FIRED up. The book is less than $6 used on Amazon and is quick and motivating.
After I read Dave Ramsey’s book I was over being in debt! I made the decision then and there that we would climb out of the hole we were in NO MATTER WHAT. To change in life, sometimes you just have to make the decision. I made it my New Year’s resolution and it may have taken us 3 years, but we did it. Looking back, I wasn’t sure what to do first after I decided to be debt free. So if you have decided that you are DONE with debt- here are the first 8 things you can do right now to start being debt free:
Get on the same page as your significant other. You are going to need to make sure that you are both happy with your plan to get out of debt and how deep you want to cut your expenses. You will also make sure that you are following the same plan. Dave Ramsey is all about the “baby steps” (more on that in a minute), but if your husband (or whoever) wants to go a different route, you need to figure that out so you are going down the same path together.
Write down your debts so you can see how deep of a hole you need to dig out of. Make sure you account for every penny- car loans, medical debt, credit cards, student loans, library fines, money you owe your mom, overdue bills- everything!
Stay motivated. I found podcasts and blogs so that everyday I felt surrounded by a group of people who were all trying for the same goal. This is my favorite getting out of debt blog and this is my favorite podcast.
Make a written budget and update it daily. I know that sounds excessive, but at the beginning you need to get and stay focused. Updating my numbers was so fun because I could see how quickly I could get out of debt! I just used a simple excel spreadsheet for this. At first, making a budget will be rough. You will probably forget some expenses, but after a few months you’ll be a pro! Stick through the rough parts, it’s worth it!
Start paying with cash. Cash is more painful to spend- you can literally see it leaving your hands. When paying with a card, you are probably less connected to the transaction. Plus, it really forces you to have discipline. I go to the bank every pay day and get out enough cash to pay for groceries, gifts, eating out, entertainment. Anything that I could be tempted to splurge on, I get out cash for so once that money is gone, it’s gone. I keep them in white envelopes that I write with sharpie on the front what they are for.
Make a visual reminder. Now that you know how much debt you have and you have talked to your partner on how you are going to get rid of it, decide on the first debt you want to tackle. Getting out of debt is all about focus so you should choose one debt to start with (Dave Ramsey suggests the one with the lowest balance). Print out my free printable (on the next page), fill it out, and tape it to your fridge
I created a free printable of a debt thermometer. Just print it on printer paper and fill out your debt and how much you owe. Every time you put money towards this debt, draw in a line and color it so you can see how far you have come. Visual progress is so motivating! I wish I had made this for myself instead of the hand drawn sloppy ones I did 🙂 (image above of the ones I made. The below is the free printable- its not that fancy, but it is symmetrical and the perfect blank slate for you to make your mark on).
I followed Dave Ramsey’s baby steps and they were SO helpful to me. Before getting rid of any debt (besides your minimum payments) he suggests saving up $1000 as an emergency fund. I love having a road map to eventual wealth and giving. My dream is that I can give more and make a difference in the world- that is my big goal. I made a free printable of the baby steps too.
To get both of these emailed immediately to you, just put in in your email and name below
So now you have 8 steps to start you down the path to financial freedom and two printables to assist. You can do it! Start today and little by little, you’ll get there! Getting out of debt was a life changing process and has allowed me to now have more freedom- I was able to cut back at work when I had my baby and I have more in my budget for travel and decorating. What would you do if you had no debt and extra money? If you have any questions, please comment below.
You may also be interested in: