If you are not familiar Dave Ramsey’s 7 Baby Steps to pay off debt, then I suggest you check it out. When I stumbled onto this one day, it was a mental game changer.
For the past fourteen years, my husband and I have been in a constant battle with our checkbook. Neither of us are very good with money, and we both like to spend before saving. We have tried many times to stick to a budget and have always given up after a few short weeks (or days, if I’m being completely honest.) We even tried debt consolidation loans TWICE, only to find that it just added to our overall debt. We made efforts. They were just misguided and misinformed efforts.
It’s like any fad diet. You have to actually change your lifestyle permanently. You can’t just look at it as a short-term solution, so that you can go back to your spending ways eventually. You have to make the switch mentally before you start, if you hope to have any sort of long-term affect on your finances.
So, after reading about the Baby Steps, I knew I needed to get organized. It took some time for me to do this. And with kids in the background of everything I’m doing, it takes longer than it might for others. It took me a few days to figure out exactly what we owe, but I did it. Here are the steps I took to get organized:
Write Down All Debt Information: This includes total current balance owed, interest rate, minimum payment, monthly payment date. I had to log into each account online and find monthly statements that I stuck in a drawer somewhere. Get it all down on the same paper, so you have it in one place. It might be hard to look at and you might be shocked to see the totals. I had no idea that we were spending $1300/month on debt minimum payments. Ouch. No wonder I never have any money to do the things I want to do!
Use Vertex42’s Debt Snowball Calculator Excel Sheet: I used this to input all the information and keep it organized. Wonderful tool that is available to use for free!
This made a huge difference for me, to have a place where I can keep all of my information organized in this way. I highly recommend it!
Figure Out How Much You Can Put Towards Debt Each Month: For me, this will start out at just $100-200 per month. I wish that we could put more toward our debt at the get-go, but patience is key. Eventually, as we pay off each item, we can roll over that minimum payment into paying off the next debt. By 2022, we will have over $1000/month going towards our auto loan and we will be able to pay it off in no time!
Make a Family Budget: Budgeting has always been something that we struggle with. We are both impulsive spenders. But if we stick to a budget, we will be able to open up several hundred dollars a month to send to debt. We made a budget for the upcoming month and will talk about it in an upcoming post.
Hustle, Hustle, Hustle: I don’t work outside of the home and stay home to take care of our kids, so my options are limited when it comes to bringing in money. In recent years, I haven’t worked very hard on side hustles, but that is about to change. I have a few work-from-home jobs lined up, and plan on cleaning out and selling house items that aren’t used anymore. More on that in an upcoming post, as well.
Check On Your Progress Often: It is so incredibly easy to get complacent and lazy about your financial progress. Keeping yourself in check is vital, so log into your bank accounts every day.
Don’t Give Up: This will be tough at times, but I am determined. We HAVE to get out of debt. I want a house. I want to travel with my kids. I want to have a successful business. I want to achieve my dreams. And I’m done letting our debt get in my way! Join me now and start your own journey!
