Greetings from the Shoebox! These cracked walls have seen much rejoicing recently over the excitement of one very great accomplishment… We are officially debt free! Yes, that’s right. A couple weeks ago we paid off the last of our (relatively) small but bothersome school debt. Of course we are thrilled at the freedom of owing nothing to anyone (except, of course, the mortgage), but we are even more jazzed about the prospect of those payments being part of our monthly budget. ($300 will go a long way!!) It has taken us three years to pay off $10,000, so it seemed natural today to offer three very basic tips to get out of debt.
The first step? Trim that budget. Cut unnecessary spending. Look for areas that you might be spending too much and then direct those dollars toward the debt. How often do you use your gym membership? Is the Hulu Plus necessary? Could you get by with less in the clothing fund or buying fewer coffees out? Our budget was already a “skinny jeans budget,” (it took some wiggling to squeeze into each month). But one afternoon last fall I took a good, hard look at our expenses and found a spare $50 in an outdated line item. I didn’t run out to buy a new pair of shoes. (Not that I can find cute shoes easily anyways as a size 11.) No, that $50 went straight to the debt payment each month. So trim the expenses. Get focused. Channel any “extra” money you find toward your debt balance. It’ll be gone that much faster.
It is easy to get discouraged year after year, when the mountain of debt barely seems to be budging. Hang in there; it is diminishing! You can speed the process along by overpaying your due amount each month. Don’t just pay the minimum—pay the maximum you can afford! Because the sooner you pay off that debt, the sooner you get to put that payment amount toward something else in your budget. You know that $50/ month that I told you about? It may seem small, but over a year it would have amounted to $600 extra taken off the debt. Every bit counts! “Go steady” means that you budget to overpay as much as possible. Do it one month. And again the next month. And the next. Be determined; keep at it. Eventually that debt will be gone.
This is also my motto for jewelry, but that’s another story for another time. What do I mean by “go chunky”? Whenever you come across a large (to you) chunk of money, don’t blow it on a new wardrobe or an exciting trip. Put it toward your debt! Our tax refunds have been the largest bits of money with which we have paid off debt, and this year it was the tax return that finally closed it out. As good as going steady is with your debt payment each month, nothing is quite as satisfying as watching a large chunk of cash chop your balance away.
Oh and by the way, if you’re wanting to get serious about budgeting and getting out of debt but just don’t know where to start (or could use some motivation), check out Dave Ramsey’s Financial Peace University. We went through his training (it’s actually a good time!) and are working through the Baby Steps of FPU.
The advice I listed above may seem too basic to be helpful—elementary, even—but here’s the way I see it. Shedding debt is a lot like shedding weight. There are countless formulas and routines and pills and all sorts of people trying to tell you how to lose pounds and inches. However, we all know that there’s truly only one sustainable way to lose weight, and it is this: eat fewer calories and exercise regularly. The same is true with reaching a debt-free financial situation. It’s so basic it’s almost offensive: spend less money than you make. Exercise a well-balanced budget. And work hard at it. So go lean. Go steady, and go chunky. You’ll get there.
…Hey all! I’ve been LOVING all the comments and interaction you’ve been giving lately. I also know that many of you are way ahead of us in the debt-free realm (and many of you are working hard to get there!) If you’re living debt free, comment below and tell us. Let’s celebrate together!