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It’s been 16 months so far into this $116,000 debt journey. We are more than half way done as of January 2020 as we paid $69,522 so far! There are a lot of factors that got my husband and I to this point. One day, we decided that enough was enough and set our goals to be debt free one day. This whole process is actually not as hard as I thought it was going to be. I had this preconceived notion that we were going to be sacrificing a great deal, it actually doesn’t feel like we have. There are plenty of factors that we’ve implemented to help us get to this point and will continue to use to reach our goal. I hope these tips can also help anyone else that wants to get out of debt too.
September of 2018 we had all this debt:
| 8 Credit Cards |
| 1 Car Loan |
| 2 Medical Loans |
| 2 Student Loans |
| 1 Personal Loan and 1 Personal Loan from family |
| Total $116,000 |
January 2020 we have:
| 1 Student Loan |
| 1 Personal Loan from family |
| Total $46,478 |
We have a combined total income of about $120,000-$130,000 a year. Basically, we had almost a year’s salary worth of debt. How crazy is that? One day we decided to follow a plan to help get us out of debt because what we were doing definitely wasn’t working. Find out how we paid off $50,000 in the first 10 months of this journey.
Related: How To Get Out Of Debt With These 5 Tips
Tips To Get Out Of Debt
If you implement a few strategies, you can also be on your way to be debt free. It’s all about finding the right tools and tips to help save you money and manage it properly.
1 | Write down your list of debt
Create a list of your debt from the smallest balance on top of the list to the largest balance on the bottom of the list. It will give you an idea of what you’re working with. Don’t be discouraged when you see all the debt you have. You can get through this! If we muddled more than half way through $116,000 then you sure can too!
2 | Create a monthly budget
It which will help you take control of your finances and draw out your map to financial success. I use the Zero Based Budget which has been extremely successful in helping us manage our money. If you want to use an app that tracks your spending automatically then use Personal Capital which is also a free app.
Related: How To Budget Your Money For Beginners
3 | Save for an Emergency Fund
Unless you’re a psychic, you will never know what tomorrow will bring. You don’t want to be stuck in a position where you spent all your extra money paying off debt while not having anything saved up during an emergency like a job loss, medical emergency, and more. It’s so important to save a good 2-6 month portion for emergencies before throwing every extra money you have at debt. You can still pay debt while saving for your emergency fund but make sure you don’t forget this category in your budget.
4 | Use the Snowball Method to pay off debt
5 | Make extra money if you can
- Put money into a high yield savings account to earn money passively
- Work extra shifts or over time
- Drive for UBER or Lyft
- Sell your clothes/furniture/toys/electronics on Ebay, Mercari, Letgo, or Nextdoor
- Take online surveys for money Get your $10 sign up bonus today with Swagbucks
- Be a freelancer on Fiverr and sell your skills including being a graphic designer, virtual assistant, photo editing, writing/editing/proofreading content, marketing, programming, SEO optimization, programming, transcription, other social media services
- Make money losing weight on HealthyWage and other apps like Dietbet and Stickk. People make hundreds to thousands of dollars by challenging themselves to lose weight which creates a financial incentive.
- Rent out a room by charging a fee on Airbnb. That can easily bring in extra hundreds of dollars each month.
Check out other ways to make extra money every month
RELATED:EASY WAYS TO MAKE EXTRA MONEY EVERY MONTH
6 | Second guess your purchases
Before you buy anything from a $5 to $1,000 item, ask yourself if you really need it. We stopped spending money frivolously just by purchasing things we actually really need rather than want.
7 | Stop comparing your lives to others
Truth of the matter is you don’t have to spend tons of money on cars, travel, clothes, etc. to keep up with the Jones’. It’s your life and not theirs. Other people probably are up to their necks in debt trying to live lavishly so there is no point in trying to keep up with others. It’s best to focus on your financial goal and be content with what you have.
8 | Personal loans can help tremendously
As a matter of fact, we took one out years ago to move out of an expensive city. We used a portion of that loan to put away in our emergency fund, applied for a down payment on our home, and applied it for our debt. In a matter of 10 months, we also paid off that personal loan off too. Check to see if you qualify for one at Lending Club to help you consolidate debt.
9 | Find Savings
Food costs was huge expense for us. We spent almost $800-$1,000 a month on food. That included groceries and take out food. You’d be surprised when you track all your transactions and find out how much you’re actually spending. To cut costs on groceries I used Ibotta to get cash back when grocery shopping.
Cooking more at home will help prevent the need to buy take out food. Making large batches of food is easy with the Instant Pot like soups, stews, tender meat, and so much more. Using the Instant Pot will help you save time and money plus you can freeze any left overs.
I used Rakuten to get cash back when booking travel, hotels, car rentals, online shopping and more.
If I was looking for spa treatment, oil change, restaurants, or activities, I went on Groupon to get the cheapest deals. At Groupon, get an extra 20% Off Local Plus An Extra 10% Off Travel. Use Code SAVE
Cut your cellphone bill in half by switching to Cricket Wireless, they even have free smartphones available. We pay $80 flat with all taxes included for 2 phones and unlimited data.
Get cheaper quotes by switching your insurance companies for the car, home, apartment, etc.
Do some DIY repair work for your home/condo/apartment by doing some research online and getting parts at Home Depot, or Lowes.
10 | Travel For Free
We didn’t want to sacrifice our travel while on this journey to pay off debt. We made it work by using travel card points to cover our travel expenses. By implementing the budgeting and snowball method, we quickly paid off all our consumer debt which in turn raised our credit scores. We qualified for travel cards that offer an equivalent of $500-$700 or more worth of points. We used those points to pay for our Carnival Cruise, Flight for Las Vegas, and so much more. Also, when we search for flights we use Skyscanner to find the cheapest flights possible.
January 2020 Debt Payoff Progress
At the end of this month, we paid a total of $1,553 which consists of our snowball debt rollover amount. So far, we now have a total debt remaining balance of $46,478. We paid off $69,522 so far in 16 months out of $116,000 total debt. Slowly but surely, we’re chipping away!
It’s been a long year of 2019. 2020 is the start of a new year. I have a goal to achieve which is to be debt free by the end of this year! Making extra money, finding ways to save, sticking to a budget, while still having fun will get us there. I hope these tips will help you as well to get you started on your debt paying journey.
Are you ready to start your own debt free journey? Get started by grabbing this free Debt Thermometer and join us in the free 5-Day Debt Free Bootcamp to pay off $500 worth of debt in your first month.