So you’ve had enough and “someday” became today; the day you begin paying off debt. So where do you begin? Here are three surefire ways to get started on your own debt-free journey.
1. Get Inspired.
You are about to make a major change in your life. From this moment on, you will be making sacrifices and will be wondering if it will be worth it in the end; so it is important to be inspired to take that next big step for the better. Good sources of inspiration can be found on YouTube with people telling their stories and shouting victoriously that they are debt free. Another invaluable resource is Dave Ramsey’s book The Total Money Makeover. In the book Ramsey tells his own story of once being a millionaire to being flat broke and declaring bankruptcy. Also included are success stories from people just like you. Pick it up at your local library or better yet purchase your own copy for easy reference.
2. Kill The Cards
Some people, once including my wife, consider credit cards as a safety net for when things get hairy financially. But what we don’t realize is these magical pieces of plastic are the reasons why we are in our hairy financial situations to begin with. Wouldn’t it be nice to pay for something with the cash you already have? Destroy all of your credit cards today because where you’ll be going you won’t need them anymore.
3. Start a Budget
Do you know where your money is going? If you manage a checkbook you have an idea, but you are re-actively knowing where your money went. Now is the time to be proactive about your finances and to plan how that money is being spent. Would you rather have a written plan stating that you are going to spend $400 on groceries this month or would you rather discover next month that you spent $800? By being intentional about your spending can free up money that you originally thought you didn’t have. In my example, you just freed up $400! That’s an extra $400 you can use to start paying off debt. You can start with a spreadsheet, EveryDollar.com (free), or YNAB ($50/yr).
Start Paying Off Debt!
Now that you are inspired, paying with things only with cash, and on a written budget, you can begin your debt-free journey.