3 Things We Did To Pay Off $40k of Debt In One Year
In 12 months my family and I were able to pay off $40k of debt. I wanted to share with you 3 ways you can achieve the same success with your finances. We all know the main steps to paying off debt; making a budget, sticking to the budget, and actually paying towards the debts we owe. We don't always know how to start and stay with such a big feat. Depending on the amount of debt you are in, it may seem like moving an impossible mountain. I want you to know if my family saw a way out, so can you.Before you start the leg work, let's talk about the 3 things that helped me pay off $40k of debt in one year!
THINGS CAN CHANGE
When you amassed a large amount of debt,it can seem impossible to get rid of it. The very first thing you need to do is believe you can get rid of the debt. It sounds simple, but it is the thing that will keep you going until the end. Once you have that true belief, you are going to start making a plan of action.
For example, when you decided it was time to go to college. You made sure you took all your standardized test. You filled out the application the correct way, and sent it off to await a decision. You didn't know if anyone would accept you, but you believed in it enough to try. So believe in getting your finances in order enough to try.
It may be hard to believe that you can get out of a large amount of debt based on your current financial situation. I understand. I was there as well. Before we decided to make a change as a family, we were coming up short at the end of the month. The tipping point was not having enough money to buy food for my daughter's scheduled birthday party! So imagine me really believing that we could pay off debt! We were barely covering our day to day living.
Let that frustrate you feel about coming up short at the end of the month, be fuel for your fire. Go after that debt with a burning, intense desire to get rid of it. Don't let debt sleep around your house any longer like a welcomed guest!
EVERY DOLLAR HAS TO GO
Each and every extra dollar you receive needs to go towards your debt! If you receive an unexpected check in the mail, it needs to go to debt. If someone pays for your lunch for the day, use the leftover money to pay towards debt. You have to get laser focused about this goal. You have to be willing to make sacrifices and change the habits that got you there in the first place. It may seem uncomfortable that every penny goes towards debt, but it is necessary. The sooner you tackle this beast, the sooner you are on the other side of debt. The sooner you make it to freedom, and you don't owe all these creditors every month.
Any bonus, gift, or money that falls your way needs to go to debt. When you get your tax refund only put money to the side that has been accounted for (example: money to buy Christmas gifts this year). Otherwise your whole refund needs to go towards debt. It will not be easy to get out of debt, but it isn't complicated. You need to make a plan or budget and stick with it. Follow the plan to the letter. You will not fall out of debt on accident. You will have to order your steps out of debt. It is a physical and mental mind shift you will go through in order to accomplish this goal. You don't have to win the lottery, just be intentional with the money you are earning. Again, you have to believe that it is possible, and worth it to pay off the money you owe.
SET YOUR BOUNDARIES
This is a hard one, but instrumental in your success. You have to let those around you know you are making a conscious effort to have better spending habits. However annoying it sounds to keep repeating the spill, "that doesn't fit in my budget" that's the level you will have to get on. If not, you will look up and be in the same spot you were before.
Just like losing weight. You may lose the weight, but the battle begins when you have to maintain the weight lost. It is so easy to slip back into your old habits. Your friends and family members will not be able to make plans for you that involve you spending money. You will have to stay firm on what you can and cannot afford to participate in. This doesn't mean you can't have a social life. You just have to be realistic, you can't attend everything. Also realize this is a temporary situation. You are committed to your goals, and you will achieve financial freedom. Once the debt is gone, you can attend every function under the sun!
The second reason to tell those around you, is for the accountability. Once my mother knew my goals, sometimes she would give me ideas to save even more money. Or if I tell her something that doesn't sound like it would work for my goals, she would remind me of my mission. You need that snap out of it moment, every once in awhile.
You also don't know how you may encourage those around you to do the same. Once they see the goals you are reaching and how much debt you have knocked out, they will want the same. They will see it is possible, and began to ask you more questions about the possibility! Who wouldn't enjoy those around you going on the same journey!
These are all things I had the implement the year I paid off $40k in debt. I want you to know that it wasn't has hard as you think. Trust me, I am a reformed shopaholic. I know what it is like to spend just because. I was able to tap into the belief that it is possible to get out of debt. I knew what advantage I would give my kids if we weren't tied down to owing the world!
Sitting down and getting my family on track financially has been one of the most rewarding journeys in my life. I want to share that journey with you, and hope that you are encouraged to do the same. If you ever need help getting things in order, I am only an email away firstname.lastname@example.org. Let us know in the comment section what steps you will take to start paying off your debt!