What an extremely busy yet fruitful season this has been. Sorry for my absence; I picked up a part-time job on top of my full-time position earlier this year for the spring, and once that ended, I was able to pick up another part-time for the summer. What a blessing, but a lot less time to do other indulgences, namely writing and reading.
This is a perfect introduction for this post, because this season of sacrificing my time in order to gain extra income has come from the advice of a financial advisor I have been avidly listening to and as a result, applying his teachings to my life. His name is Dave Ramsey and he is the author of many books and a radio talk-show host, but most famously known for his course called Financial Peace University, which many churches are currently offering to help their congregants get out of financial debt.
I am old enough to have more debt than I should, and in the midst of my big-girl move from Florida back to my hometown, I have been called to mature. This includes taking responsibility for the areas of my life where I am falling short due to my irresponsibility (aka overspending, charging credit cards, living above my means, car debt, etc.).
In February, I began this journey toward becoming debt-free. Five months later, I have paid off and eliminated one credit card debt and Lord-willing, by the end of this month, my car debt will be completely paid off. (To put it into perspective, had I stayed with my car payment plan, I would not have been free from this debt until some time in 2016) From there, I will be attacking two more debts, and come January, I will be completely debt-free.
To say this was/is easy would obviously be a lie. Nothing is easy when it comes to finances because everything is screaming for our financial attention. Everyone wants my money! But with a little focus and determination – and listening to Ramsey give lots of advice to people on his radio show (you can listen to it here), here are some strategies that helped me get the ball rolling.
I looked at my monthly budget and tried to find the expenses that I could immediately eliminate in order to have more cash on hand to put toward my debts. Little things like indulgences, shopping, overspending in groceries, shopping at the thrift store for things instead of going to the mall, getting rid of Hulu and Netflix ---in the end, all of these things added up to big savings. For areas, like clothes shopping or eating out, where I could afford to immediately stop spending all together, I have. Where can you immediately save money right now? What are some ways you can free up funds so you can redistribute the money toward your debt. Be realistic and be creative!
Make a budget
What is the LEAST amount you can possibly live on right now? Figure out what that number is and do whatever it takes to live on that amount for as long as possible. Keep track of every penny, keep a spreadsheet or a journal and know where your money is going. This helps keep you accountable.
Live without perks for a while --- eating out, going to the movies, getting your nails done --- all luxuries and are not necessities. You can afford to sacrifice your wants for a while to take care of your needs. If you feel bummed out about that, maybe you can allow yourself to KEEP your $10/month Netflix account and ONLY use that for dates with your boyfriend or with friends, or for your leisure if you absolutely need that; but if you are not watching Netflix at least 10 times a month, then it is a waste of your money and you are better off using Red Box. See what I did there? ;)
Attack your debt vigorously starting with the smallest debt
This might not seem rational, but it is. Start attacking your debt from smallest to largest. Why? Because you can pay off smaller debt faster and get rid of it more immediately so you can move on to the bigger debt. It also helps with feeling accomplishment fast and serves to keep you motivated and not get overwhelmed by starting with the largest number.
Set up automatic payments
If you do your banking online, you can probably pay bills online and set up an automatic payment plan. Figure out the amount you are going to put monthly/weekly toward your debt and set an automatic transaction for it. That way, you are not tempted to use the money for anything else. You set the plan and you forget it. I believe you can set a date for when you want the automatic payments to stop. That’s ideal.
Get extra income
Find a way to make more money, even if that means you take up an extra job. This might mean you have to do something that seems or feels like it is degrading to your value like cleaning houses, babysitting or secretary work - but the truth is, as long as you are not compromising your morals, these jobs can bring in a significant extra income. Extra income means you can pay debts faster. It's a no-brainer. Sacrifice sleep, time, etc., and remind yourself that this is TEMPORARY. This is not going to last forever, and your debt is dwindling, and in the end, you are going to have WAY more cash in your bank with less going toward bills.
Pay now, save later
When trying to get rid of debt, do not even focus on trying to keep a savings. The point is to attack the debt vigorously so that you can get to a place where you can save the largest amount of money possible for your retirement and to anticipate future spending or emergencies. We are looking to get surplus so that when you are hit with the unexpected expenses in the future, you have the money in a savings to pay for these things CASH, and never go into debt again. That is the goal and that is your motivation.
Ultimately, I am trying to put myself in a position where I am not going to be a slave to owing people, but I am going to have MORE than enough money to cover my expenses and still have enough to eventually give to those in need. That is the point of this. It is not that I love money, but money is a tool that us as Christians can use to further God's kingdom and live worry-free of having our houses taken away or not having the funds to cover basic needs. We have a rich inheritance that does not include poverty, but includes good stewardship.
I pray this motivates you to begin your debt-free journey!
For a taste of the Dave Ramsey show, watch below: