“How to get out of debt” You cannot imagine how many times I typed that into the search bar of my browser late Sunday evenings… I didn’t want to go to sleep because then Monday would come quicker and I would have all the creditors calling me. The weekend was my safe haven, come Monday I would just pray for Friday to come around quickly and it would start all over again.
This was a burden I was carrying alone, I couldn’t bring myself to tell my husband how bad the situation was, I felt desperate, alone and ashamed. I literally did not know what to do. I was only buying extremely necessary foods and went about my day as “normal” as possible.
It took me some a lot of time,
to realize that sharing the burden with my husband would’ve been a lot better for my mental state. It took me even longer to realize that if I had looked at our financial situation exactly how it was at the time, I would’ve seen that it wasn’t as bad as I thought. I could’ve taken care of some situations and not let them become the mountains they became. But I was ashamed and worst, I was feeling sorry for myself and the only thing I thought to ask was, “why is this happening to me?! I’m a good person, why me?!”.
Which is why, I now scream at the top of my lungs (oh boy! should I have said sing?!) the first step to get out of debt is to look at the situation, really look and see what is going on. And instead of asking “why me?!”, just be grateful for where you are and make the decision to do whatever it takes to turn the situation around.
Getting out of debt. Is it going to be easy? No.
But you need to decide you’ve had enough. You need to decide there’s more to life than this phase you’re going through. Because, I found out that no one cares what you are going through. No one is thinking about you, everyone is only looking at their own belly button. And the sooner you realize that, the sooner you can start to do what it takes to get out of that situation without much thought of other people’s opinions or judgements. At the end of the day, you are the one who matters in all of this and the only one capable of getting out of it. Again, no one is thinking of you.
So, getting more practical, what can you do, exactly, to get out of debt and start creating the life you want to live? (This is one of my favorite questions to ask!). You need the right strategy! You need a plan that will serve as the guide for your own journey. Just because me, or someone else on the internet is telling you that “this is the only way you’ll get out of debt!” doesn’t mean it’s true. This is a sure way, because I’ve done it, but you have to take it and make it your own. I find it’s good to have guidelines, or roadmaps, to help you reach your goals faster. But we are talking about personal finance, and it’s called personal for a reason! Because your situation is unique, it’s yours and no one else’s.
So, here are my seven steps
to help you reach your goals faster, but remember, the most important thing is to not give up. Consider these steps, as your guidelines, your starting point and get to work!
- Create a budget – (what a shocker, right?!) You can’t make progress in any area of your life if you don’t know where you are. If you want to go on vacation, there are steps you need to take to make sure that it happens, right? You need to put it on your calendar, tell the HR people at work the dates you want, save money, book tickets, a place to stay, whatever it looks like, you need to be proactive and do some work. It’s the same with your money, you need to be proactive so that it goes where you want it to go. A budget can be as detailed or as simple as you like. If you never budgeted before and are getting overwhelmed just by thinking about it. Instead of starting with a Zero balance budget (my favorite!!), start with a 50/30/20, you can find out more about budgets here. But, I do want to warn you, if you are serious about getting out of debt, like I know you are, you will need that Zero Balance Budget (I have plenty of templates, if you want one just send me an email or a message and I’ll gladly send you one!), because you will need to go through your bank statement and make a list of all your bills and subscriptions and where your money is going to truly create a plan that better works for you.
- Build a small cushion for the unexpected – also known as an Emergency fund, I like to call mine a Get Rich Fund (because it’s the seedling that will start growing), but this one is for the everyday stuff that happens, like tires for the car or unexpected phone bill. Save just enough so that you won’t reach for a credit card if, or when, it happens. It will happen. I know it may sound counterintuitive to save money when you are trying to get out of debt but you also want to make sure you are not creating more debt or new debt. For a long time we had around $500 (impossible to save more because life kept happening!) Dave Ramsay suggests $1000, but, whatever you can or are comfortable with is fine.
- Use the Snowball method – this is also my preferred method to pay debt. It’s when you list all your debts, pay minimum on all of them and through everything else you can on the smallest one, independently of its interest rate. This is a controversial one because some say you should start with the debt with the highest interest rate, but there’s something about knocking off debts quickly that will get you more excited to keep going. Because this is hard stuff. So any tips or tricks to make it a little less painful, go for it!
- Negotiate – did you know that you can call different insurance companies to get quotes on the insurances you have and change for the one that gives you a better deal? You can! And you can even come back to them and say, I got a better deal somewhere else, if you match it I’ll stay. If not, I’m changing. And it works! You can also call your phone, electricity and streaming services and get better deals. Or you may just consider stopping your streaming services for a little while. Especially if you have multiple and if you do, how much time are you spending watching TV? Well, if you are spending a couple hours a day watching series and movies then, you’ll love my next tip for you…
- Make more money – Yes! Get a side-hustle, especially if you have a lot of time to watch TV! For a quick win, start delivering food, or supermarket goods, there are plenty of these wherever you live in the world. If you want there are a couple you can do online. Here I want to say the following, you are not going to make thousands of money with a blog if you are just starting out and have no audience yet (sorry!). You are not going to make thousands in a week with digital products if you don’t have an audience yet. Having said that, these are my favorite side-hustles, but it does take a little time for them to start making you money. I do low-content publishing (you can find out more about it here). I do affiliate marketing but, again, it’s very hard to start and no, it’s not simply creating a pin in Canva, posting it to Pinterest and receiving big bucks. I know because I’ve tried and it’s not true. You will make money with these, long term, or if you already have an engaged social media following, then go for it! I’m rooting for you!
- Avoid new debt – we kind of touched this one already. The small cushion you built is to avoid this situation! You are committing to get out of debt, that doesn’t mean you can’t have a credit card. It means you can’t carry a balance each month on that credit card, or use it to buy things you can’t afford. And if you can’t pay it in full when that credit card bill arrives, you can’t afford it.
- Make a date – it’s important that you don’t set it and forget it. There are always unexpected bills, or income, coming in that need to be addressed. Maybe you spent less, or more in one category of your budget and you need to look into it. So, at least in the beginning, have a “date” night with your finances. It’s important to keep an eye on the prize and also you won’t get it right the first time. Just knowing that should take away some of the pressure. I still have a date with my finances (and my husband, hence the whining!) once a week and when I don’t I feel I get side tracked even more! Didn’t I tell you that I get side tracked alllll the tiiiiimmmmme?! I also do this so that I’m accountable and so that I can celebrate my wins! It’s important to acknowledge the good! Even when sometimes the good is that you showed up to the date because the budget went sour a long time ago… it happens. Just keep on going, the most important thing is… come on I told you at the beginning of this post! TO NOT GIVE UP!
I hope this inspires you (find more inspiration here!) and gets you excited about taking back some control over your life. Life really is wonderful and I would hate to see you not live it to your full potential!
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