When it comes to debt it is always much easier to rack it up then it is to pay it off. The idea of buy now, pay later may seem more appealing then spending your own cash. They give you a promotional period that has no interest rate to entice you to pay with credit. You convince yourself that you will pay it off before the promotional period is over.
But then life happens, you lose your job or have an emergency that reduces the amount of money you can put towards the new debt. You pay the minimum amount due, then before you know it the interest kicks in. Now the life of this loan that was supposed to be paid of within the promotional period just got longer and bigger. Now you are left with regret, anxiety and annoying credit card debt.
I remember being in this same position just a few years ago. I had over 20 credit cards and thought I was living the life. My husband and I both had great jobs with good pay. We were using credit cards for gifts, groceries, gas and everything that our hearts desired.
I had a job and always paid my bills on time. What could go wrong, right?
Wrong!
Even with us making a decent amount of money, we rarely had money to last us for the week or even emergencies for that matter. It was an emotionally frustrating time of my life. And I never (ever!) want to feel like that again.
We had to change the way we looked at credit, debt and change our spending habits. So this year has been ALL about paying off our debt and becoming financially independent.
As a family of five it can be a little challenging to put any money towards debt but we were relentless and transparent with our kids. Things like vacations, family outings and frivolous spending had to be sacrificed by all of us in order for us to accomplish these goals.
With that said I wanted to share some of the steps that my family took to pay off over 30K of debt in only 1 year!
Just a friendly reminder that what worked for my family and my situation, may not be ideal for your specific situation. Utilize the best tips that help your family get out of the vicious cycle that debt brings by changing your spending habits and creating a budget that works for you.
1. Stopped using credit! (Duh, right? – but it’s important to mention)
I always grew up thinking debt was a normal part of life. I mean my parents are in their 50s and still have debt. Now a days you hardly meet people that don’t get into debt, whether it’s for a car or house or even everyday expenses. But what if I told you that there is a world where you don’t have to borrow money from anyone and still live an amazing life? That’s the world that I want to be a part of and the first step to accomplishing this is letting go of those credit cards.
I know that credit is needed for many things now like jobs, light and even housing. If this is you, I would highly recommend being very cautious when building your credit. Make sure it is manageable and don’t rely on credit to live your life.
I am at a point where I have my house, paid off my car last month(YAY!) and am at a point in my life where I am investing in my future and my net worth and debt has no place in that life. If this is you, cut those credit cards up and don’t look back. Pay off your credit cards and whatever you do DO NOT go back into debt!
2. Focused on one debt and relentlessly paid it off
For us it was my car. We paid off 13K in less than one year to free up more monthly income to pay other debts. Although it was sometimes tough especially when we had surprise expenses pop out of nowhere. But no matter the hurdle I made sure I was making at least 2x the monthly amount on my car. I was determined to pay off my car. This was the second highest bill in my household and paying this off would help me free up more money to pay off more of my debt.
3. Cut back on beauty expenses
This one hurts I know ladies, but believe it or not a lot of the beauty expenses we have we can DIY. Eyebrows, manicure, pedicure are all things that you can do yourself to save some money. And if you’re brave like me you can cut and color your own hair. Bonus if you can cut your own kids hair for extra savings. I can pull this off with the smaller ones but not the older ones 😅 that’s fair.
4. Cut back on instant gratification
I say cut back because I still think it’s important to reward yourself every now and again (treat yo’ self, ammirite?!).
Consider giving yourself a monthly allowance to spend on anything you need (or want). This will help you stay on budget and not make you feel like you are depriving yourself.
Staying on budget is key!
5. Stopped saving temporarily
We stopped all saving investments to concentrate on using all our monthly net income towards our debt. I do recommend having a safety net of a $1,000 for emergencies.
I know this is unorthodox and you are always told to save as well as pay off your debt. However for me paying off my debt was much more urgent than savings (for now).
6. I also temporarily stopped my 401K
This one was tough for me since my company matches up to 6% and I did not want to leave that money on the table. But I have a goal and I am putting ALL my efforts on this goal. I only plan to do this for 6 months, and then come back with a saving vengeance and put anywhere from 15-20% into our 401K. My retirement is more than 35 years from now, so if you are closer to retirement then this would not be ideal for you.
7. Sold stocks
About a year ago I bought some stocks for some reputable and known companies like Amazon and Facebook because I wanted to learn more about investing in stocks. I had them for a year and made 3x what I initially invested.
The money I made from selling these stocks was all used towards my debt.
I do plan on investing in the future again, however as I have mentioned before paying off my debt is my #1 priority right now.
8. Meal prepping
Meal prepping can save you hundreds on unnecessary meal expenses. On a regular work week we can spend anywhere from $10 – $20 eating out. Times that by two people and it can get a little expensive.
So every Sunday my husband and I sit down and plan out our meals for the week and create a grocery list. We cook and prep all our meals on Sunday so it is not overwhelming during the week. Fridays are usually a free for all and we treat ourselves to going out for lunch. This helps us stay focused throughout the week and look forward to that meal on Friday.
I follow many people on Instagram that have amazing tips on meal prep and of course Pinterest is one of my favorites sources for meal prepping help and great recipes.
9. Living a minimalist life
Of course I want a new wardrobe every year but my goal right now is paying off my debt. So I have a few staple articles of clothing that I mix and match. I also started hitting up discount stores, clearance sections and resale shops for things that I absolutely need.
As mentioned in tip #4, I do give myself a monthly allowance to treat myself to anything my heart desires. This helps me still live a minimalist life without giving up everything that I want, like craft supplies 😅!
10. Determination and discipline
This goes without saying, but Ima say it anyway. In order to accomplish your financial goals or any goals for that matter you have to have discipline and relentless determination. If you give up because it gets to hard then you may never reap the benefits of what could be.
I know what a debt free life can look like because I compare my life now to where I was a few years ago. I remember always playing the “I hope my card goes through” game and no one is a winner in that game.
Now that I have changed my spending habits and created a plan it has changed my life for the better. Being debt free opened up so many opportunities to live the way I always dreamed of. We are able to fund family vacations with just cash. I am also able to give back to organizations that mean a lot to me. And most importantly I am able to invest both time and money into myself and my future.
These are the steps that my family took to pay off over 30K this year. My goal for 2019 is to pay off the remaining 35K of debt that I have left. That will only leave my house debt to tackle! I am excited for my future and what my life with no debt will look like!
Make sure to also check out 5 Debts to Pay First! & 10 Tips for a Frugally Fantastic Life! for even more tips to living a debt free life.
I hope you find these tips helpful! If you have any additional tips (or questions) you would like to share, please leave them in comments below and I will get back to you! Also don’t forget to share with anyone you think would find this info valuable.
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Live your best life (debt free),
