Seems like such a dirty word, doesn’t it? No one wants to talk about it. We hide it in the deepest parts of our brain, leaving it for another day. Well, I’m here to tell you that TODAY is that day! How would you feel if you were debt free? How would you feel if you could use your money for fun things, instead of barely paying your bills?
Being debt-free is not impossible. But, it comes with hard work and dedication. There is no quick fix for getting out of debt. You will have to sacrifice, work, and live frugally. Anyone else telling you that they can easily get you out of debt is a liar. Trust me. You will feel proud and accomplished once you kick debt to the curb!
Here at Undo Your Debt, we want you to see results! Results are the BEST motivator you’ll ever find. If you keep chipping away at a giant debt, and barely making a dent, you will be discouraged. We are here to give you the information you need to put debt behind you. Are you ready to start your journey with us?
Okay, here we go! Your first steps to becoming debt free start here:
1. Cut ’em up!
You heard me. Go get your wallet, pull out any credit card you have and CUT. IT. UP. If you can’t handle this step, then you might as well not read on. Keeping the cards in your wallet just makes you have a cushion to fall back on. If you use them once, you’ll use them again and again. You aren’t going to get anywhere unless you get rid of these. Sure, you can freeze them in a block of ice, but then you can just use it tomorrow when its thawed. Or, you can run it under hot water and get it out in an hour. That’s not effective, and neither are excuses.
2. Make a budget.
This step is extremely important! If you don’t know where your money is going, you’ll never be able to get out of debt. Sit down, figure out everything you owe (bills,debts,hospital,loans,etc.) and write it all out. You should be paying all bills for the home and making minimum payments on all debts. If the money going out is more than the money coming in, then we need to re-evaluate your income. You might have to get a side-gig. See our post on how to create a budget here!
3. Get current on your bills.
You’re not going to get out of debt if you have 3 shut-off notices on your kitchen counter. You absolutely HAVE to be current on ALL of your bills to begin this journey. You shouldn’t be throwing extra money at a credit card if your electric bill is late. Always stay current!
4. Start a savings account.
Here’s where some people are going to lose me. You should have a decent amount of money in savings before you start paying things off. Here’s the reasoning: If I start giving every extra dime toward my credit card, and my car breaks down, what do I do? I don’t have any money saved, so I’ll be forced to undo all of my hard work and use a credit card. See how that’s not effective? You need AT LEAST $1,000 in savings. If you live a life where emergencies are typically MORE than $1,000, save more. This step really depends on your assets. If you make a small salary, you can save a little less. This step shouldn’t take more than 2-3 months to complete MAX. If you have to sell your favorite TV to make it happen, DO IT!
5. Make a debt pay-off plan.
Here’s where making progress fast becomes important. Like I said before, if you’re chipping away at something and barely getting anything done, you’ll quit. List ALL of your debts from biggest to smallest. This is your plan. Start paying things off that are small. A $50 dentist bill? Pay it off! A small, $150 credit car? Pay it off! You’ll feel so much more accomplished when you can check debts off as paid. Plus, it’s super fun to cross things off lists!
These are the things you need to do to start your journey to becoming debt-free. I do believe that modifications can be made where they are needed, and you should always do what’s in the best interest for you and your family. If you have any questions, please leave a comment, or you can reach us on any of our social media handles below!