A huge passion of mine is helping people find freedom from their debt and stop living paycheck to paycheck. I am planning on taking classes to become a financial adviser, but until then, I’ll just put all my thoughts and the things I’ve learned on here! Below I’ve listed out my ways that have helped me get/stay out of debt and stay financially comfortable.
- Budget- You cannot expect yourself to be successful financially if you do not have a budget. It’s like going on a road trip to a new place without a map. I use everydollar.com and HIGHLY recommend it. I’d be lost without it.I pay $100 every year to have it connected to my bank account which is definitely worth it. Every transaction is linked to my budget, and I can drag it to whatever category (income, groceries, fun, bills, etc.), and it tracks how much I have left in each category. When you first make your budget every month, you enter your suspected income and then enter the amounts of your bills and savings. A lot of the amounts stay the same every month, but you can change them or add specific categories whenever you’d like.
- Debt Snowball- This strategy created by Dave Ramsey has helped TONS of people get out of debt.
Basically you list out all of your debts from smallest to largest. Then you hit the smallest one with as much money as you can while paying the minimum payments on the rest of them. You do that until you’ve paid them off one by one. This helps you stay on track and not get discouraged. That’s how I paid off my student loans in less than a year. - Credit Cards- CUT THEM UP! If you are working to get out of debt, why would you keep one of the things that buried you in the first place? I’ve heard a lot of people put up fights for this one because they get such “great deals”, and it’s their safety net in an emergency In reality, most of them are not using them for these reasons and are racking up debt because of how easy it is to swipe a card that doesn’t instantly show up on your bank statement. CUT. THEM. UP.
- Saving- I budget out a large part of my income every month for my savings. I move it at the end of the month to my savings account. That way it’s totally out of my checking, and I don’t feel as tempted to spend it. Dave recommends saving $1000 before you pay off any debts (besides your minimum payments if you’re due to pay them). Then after your debt is paid off, start stacking up savings. You truly never know what might happen, and it is so important to be prepared.
- FPU- Yes, another Dave Ramsey creation. Financial Peace University is a class that you can take in person or online through Ramsey Solutions, and you learn everything you need to know about how to pay off debt, how to budget, and how to set up your finances for the future. I took it online and was able to print off all of the lessons and fill in the blanks on the worksheets while I watched the videos.
If you’re like me, writing things out is the best way to learn. Every lesson is filled with worksheets like the ones above. - Pay Cash- I always pay cash for things like groceries, eating out, fun, shopping, and things like that because it really makes me think about what I’m buying, and if I actually need it/can afford it. Like I said above, it is so much easier to swipe a card than hand over cash. For example, after I go grocery shopping, I write out how much I spent and how much I have left for the rest of the month on the corresponding envelope.
I take out the money I budgeted for each category at the beginning of the month and fill up each envelope. It’s a great way to stay organized and on track. My envelope system is from the Dave Ramsey online store.
Those are my main tips for getting and staying debt free! I believe that God will ALWAYS provide, but I also believe that He provides by giving us the tools we need to be prepared. I hope they help you all too and please share your answers to the questions below!
- What is your favorite way to pay off debt?
- How much debt have you paid off?
- What helps you stay motivated?
- Any questions?