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:
step one
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.
step two
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!
step three
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.
step four
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!
step five
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.
step six
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
step seven
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).
step eight
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
conclusion
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.
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Always love motivation on our debt free journey! I like the idea of a thermometer as a visual.
Thanks Jamie! I so appreciate it! If you want motivation you should seriously read Dave Ramsey’s book The Total Money Makeover. It changed my life. I’m glad you like the thermometer!
We want to be out of debt! But I’m so overwhelmed! I feel like there is more going out money wise than coming in! I feel like we’ll never be above water! Any suggestions?
Hi Megan- I have TOTALLY been there! Have you read my post where I outline how I step by step got out of debt? It’s here https://athomewithashley.com/how-i-paid-off-over-40000-in-debt/. If I was you, I’d go to the library and check out Dave Ramsey’s book The Total Money Makeover. It is a quick read- and then start following his instructions step by step. It will work!!! In the meantime, you might need to pick up extra jobs as you get your debt gone. It is hard, but so worth it! It was the best thing I have ever done for myself and my marriage. You can do it!!! And you’ll be so much happier. Best of luck!
Hi Ashley, my husband and I just finished reading The Total Money Makeover! This is an excellent summary- great post! Budgeting is so important and it always surprises me where our money goes. Thanks!
Thanks Ann Marie! I so appreciate you taking the time to comment. Didn’t you love the book?!
I love the debt thermometer. What a great idea! Will definitely be using this. Thank you for sharing!
Thanks Lauren! I so appreciate that! I made this for the blog and was wishing I had had it when I was going through my debt free journey. I need to make one for my saving goals 🙂
I just read this today and it really hit home with me. I have never used a budget and i struggle with buying items ti make me ” happy” or feel better just to have another emotional let down and then struggling because of my weakness. This has inspired me and I have decided today That I dont want to feel this way anymore so I am going to change.
Hi Robin- that is amazing! It is seriously by making that decision that you will change your life. Dave Ramsey says you get out of debt “when you are sick and tired of being sick and tired.” You can do it!!! This was the best thing I have ever done and I know how powerful it can be to be debt free. Thank you for commenting! You made my day!
I am trying to receive the free pintables but I have not yet received an email. 🙁
Can you possible try sending them to me, pretty please.
Thanks!
Hi Kaley, I just sent them to you. Let me know if you don’t get them and I can resend. Thanks and good luck!!
Hi Ashley. Thanks for sharing your journey, I’m feeling totally inspired. I’m starting my journey next month and am looking for all the tips and inspiration I can get! I’m sure you know the feeling ;-). I got your downloads but I’m kinda loving your hand drawn one too! I’d love a close up of them…any chance you could email me a closer photo? Or just tell me how you tracked it? (Not sure if that even makes sense…) Did you put the total debt at the bottom and then go up to zero or the opposite way?
Thanks a bunch for inspiring so many.
Ni Nichelle. Thank you for commenting! I am SO glad that you are feeling inspired- you can do it! And it WILL change your life! So I made the download exactly how I made my hand drawn ones. I put the total at the bottom (say $500) and then worked backwards to $0. So if I paid $100 off, I would make a line and next to it write $400 and the date. When you paid the whole thing off you are at $0 at the top.
Thank you!
Getting out of debt is so important. Usury {interest} is a modern form of slavery. Buy buy buy stuff you don’t need then be enslaved to it for the rest of your life as you work your days away paying it off. I think a very important step in becoming debt-free is learning how to detach from material things. When we went minimalist it helped change our perspective. Not only do we have less stuff now but we have zero debt and less stress as well. We’ve been debt free three times now. Once by bankruptcy, twice after a trailer purchase failed and we had the remodel repairs on credit, and the third time our engine died right after we had paid it all off so we ended up using credit for a new vehicle. We are debt free again as of February 22nd and never going back. We paid off about 14k total debt between three credit cards in one year. Our tax return covered just over half of it and the rest was a whole lot of hard work and sacrifice and it was so worth it! We’re free! Dave Ramsey has some great ideas. We paid off all our smaller debts first and it definitely kept us motivated. We’re working on our emergency savings fund now. Congrats on being debt-free!
Thanks Holly! I love reading your story! Yay for being debt free!!!
Hi Ashley! I met you on Twitter and directly jumped to this article. I am in love with your blog!! Now directing towards subscribing, cuz your write very useful and implementable topics. Thank you so much for helping me out this way. This article particularly is very motivating. I gotta some work to do now… you know it… it’s debt clearance 😀
Hi Tara! Thanks for coming over and reading! Good luck with your debt- it’s totally doable! Have a great week! xo, Ashley
Hi Ashley,
If someone could help me with my situation it would be appreciated.
I live in a 1 income household in Melbourne Australia where I get paid $4201 AUD monthly.
I owe $50k in debt combination of personal loans, credit cards and loans from family. I am renting and have no children.
How do you suggest I tackle this?
Any assistance would be appreciated
Hi Nic- first of all, I’d buy The Total Money Makeover and read it. It’ll give you step by step directions. First, you need to become dead set that you’re ready to get out of debt. Next, you need to start cutting any expenses you can- turn off the lights, use less toilet paper, pack a lunch, walk instead of driving. Then every extra penny you save, pay it towards your debt. You can do it!!!