Here are some helpful ways to help you erase your debt.
Make a Budget-
Creating a budget is by far the smartest way to stay organized. With it you can know how much money you have, where it’s going, and use that knowledge to discover where you can cut or add to places. It can get frustrating to make one at first, since you need to track down EVERYTHING, but once its put together, maintaining it is fairly simple. You can create one using a notepad and pencil, or open up an excel spreadsheet. Go ahead and track all your expenses for a few weeks and write down everything, use that knowledge to get an idea of where your money is going. You may find money going to places that you didn’t even know about. Figure out where you can cut your expenses, put into savings or apply towards bills to help them get paid faster.
Change the way you think-
You will need to change your spending habits, stop grabbing those items you don’t NEED, start making a shopping list and sticking to it. You don’t need that .57 candy bar at the register- you DO need the eggs, milk and flour in your cart. If that .57 candy bar wasn’t in your grocery budget, you don’t need it. You need to be strict on your spending habits, don’t let anything slip. This is difficult- even I allow my kid a small reward when shopping just to save me some sanity, but I put it into the budget and make sure I always account for it. $10 a month is set aside for this specific reason, because 90% of the time she grabs a bottle of juice, or a pack of mini m&m’s, or bag of chips.
If you shop with a credit card, you need to be extra picky about what you do/do not buy. When you have a card, it’s so much easier to put the non-necessity items in your cart, thinking you’ll pay it later, it’s okay because later you’ll have money right? –Still very much wrong, think of all that interest that will accumulate. As I’ve said, these cards are just fancy pieces of debt that fit in your pocket. You need to change the way you look at things, and the way you think, if you are ever to get out of debt.
Paying off credit cards-
Credit cards are fancy pieces of plastic debt that can fit comfortably in your wallet. Your goal as a savvy spender is to figure out how/when to use it appropriately. You should always pay MORE THAN the minimum monthly balance. At the very least you should double it. Not every budget can afford such a thing though so you need to sit down and look at which one has the highest interest rate, find that card and apply as much money as you comfortably can towards it. The faster you pay off that debt, the less interest you have to deal with. Store credit cards are some of the highest interest rated cards ever, but they can give you some of the best online/in store discount deals, an really help you to save money; so I don’t recommend cutting them up. However, if you don’t pay them off in a timely fashion your savings could all end up going into the interests alone! Not worth it.
Homework- write down how much you owe on all your credit cards right now. Take and figure out the interest on each of them and add it to the final balances, watch how high your total debt is now. It can get scary high if you aren’t careful. You DON’T want to pay this big number, and by paying more than your monthly balance on each of them, you are reducing your debt in a lot of areas.
My store credit cards- the monthly minimum payment on each is $20-$25. I pay $50 per paycheck (twice a month) so $100 a month total towards these cards. I don’t always have an owed balance on them, but sometimes a deal comes up an I know I need to grab it right then and there, so I happily charge my card, and have my debt paid off in as short of a time as possible.
My non-store credit card has a no interest if paid in full within 2 years, and I owe much more on that (roughly $1300), the monthly minimum on it is $57, but I pay $100. Because there is no interest on it, it isn’t my top priority, but I still make every effort to pay more than the monthly minimum.
Money back apps, and easy monies-
Some people are lucky enough to get holiday bonuses from their workplace. Others get double pay for working longer or during the holiday season. Military gets a clothing allowance once a year of a few hundred dollars, around the first of the month, after their yearly anniversary of singing up. Taxes back are also a great amount of money if you have kids. These bonuses should never be counted towards vacations, gifts, or frivolous expenses (so long as you can help it.) If you don’t need new clothes, don’t need anything major, but have debt, place as much as this money as possible towards your debt, you can take a huge chunk out of it. Once your debt is taken care of, and you have a nice savings account ($1000 is a great number to aspire to) only then should you consider that trip to Disney land, Hawaii, timeshare, etc. I’m not saying pay off that $200,000 house on a $40,000 a year gross paycheck, before going or doing anything fun, but you should at least prioritize your funds, and knock out what you can beforehand. And then use that same amount of money you were putting towards bills, towards your savings (or towards the last bit of that house payment). (You’ve already grown accustomed to not using that money, so you won’t miss it if it goes away.) And/or you can create a savings specifically for that something fun that you were wanting to do. Have a target goal too, once you reach X amount of monies, you get to do it, you will feel much better about everything at this point, get the best out of your vacation, and still come back home to a great financial set up. The best part about entering a vacation as debt free as possible, and with a great savings- you don’t have to be that family brown bagging a peanut butter sandwich to Disney world, you don’t have to be the one with a crockpot in the hotel room to save on dinner, you CAN go anywhere, do anything, buy all the souvenirs, and have the most amazing, fun, memory filled vacation of your life. Of course you can still be frugal if you choose to be. Once your fun event has been achieved, you can go home and try to crank out as much money from your paychecks as you can to get the rest of your debt paid off and live a happy beautiful debt free life like you deserve.
Money back– recycling is a great way to get money back, if you drink from plastic bottles or aluminum cans you can be getting a great deal of money back over time. Set this money aside to help pay off your debt as well.
There are some great money back apps out there too, (View my favorite money back apps here)
I’m sounding a bit contradictory here- but with any real plan and execution, it’s always a good idea to set little milestones rewards. You need to have little things to look forward to, so that you can feel better about everything. Saving money, can feel like a prison sentence, staying home-not going anywhere, not having those fun trips to the beach to save on money. After a while, you’re going to break, so set yourself up for small rewards along your debt paying journey. Maybe every time you reach a quarter of your goal, you can have a small weekend getaway (paying for it in cash.) Or you can have a nice family trip to the movie theater, or something else not extremely expensive (but still fun.) Then once you get your debt fully paid off (or at least that 90% that I mentioned previously,) start planning out that major reward you’ve had your eyes on the whole time.
Sell your unwanted stuff-
Like no joke, that old vacuum cleaner you haven’t touched in ages-someone wants it, because they can replace that broken belt and have it be like new again. You wont miss it right? You already bought a replacement vacuum. You know what? I’m sure you have a TON of older stuff in this house that you don’t want anymore. Why not try to sell it and get some MORE money to pay off your debts. (While making your house look neater, cleaner, and more organized in the process #WINNING) You can have a yardsale the old fashioned way, or look to your local fb pages to sell, Craigslist, Ebay and other yard sale type apps/websites like Offerup and Yerdle.
I had a steam mop, vacuum and a carpet cleaner that I was wanting to stick on the curb and trash. Decided to try and sell them on my local pages, got $40 for them, when I was willing to let them go for $0.
You never know who wants your trash and is willing to pay for it. –you never know until you try, so might as well give an effort and put any earned money towards your debt payments.