It’s Not About the Money.  It’s About Taking Charge and Becoming Debt Free

 

 

It’s Not About the Money.  It’s about taking charge and becoming Debt Free.

Here are the steps I used to Become Debt Free:

1.  Get organized:   Its nearly impossible to stay in debt if you’re organized.  For most people this means opening the credit card statements that are unopened in a box or drawer somewhere.

You can no longer hide in denial about the credit card debt or student debt that has accumulated.  By getting organized, you will be able to Take Charge of your personal finances.  You wont need a personal loan or any debt relief.

Right now, I’m reviewing my year end credit card statements from last year and I see so many charges that I have been able to cut out.  And I feel great about all the money I am saving.   Read more about the dumb stuff I bought last year.

 

 

 

2.  Create a Budget:

It doesn’t have to be fancy.  On one side is all the income you have coming in.  And on the other side is ALL the expenses you have going out.  Every dime!

Which means you must open the credit card statements and really understand where your money has been going.  One of the advantages of this exercise is that it allows you to find your areas of wasteful spending.

 

Relevant Articles:

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It’s not about the Money.  It’s about Taking Charge.

 

3. Pay Down Debt:

The debt snowball method is a great  debt reduction strategy where you pay off debts in order of smallest to largest, gaining momentum as each balance is paid off. When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance.

It looks something like this:
Step 1: List your debts from smallest to largest.
Step 2: Make minimum payments on all your debts except the smallest.
Step 3: Pay as much as possible on your smallest debt.
Step 4: Repeat until each debt is paid in full.

 

4. Eliminate wasteful spending

The most obvious wasteful spending for me was a storage locker I was paying nearly $100 a month for.  It made me so angry that I eventually began this journey and started writing this personal finance blog.

Use the old maxim, A Penny Saved is a Penny Earned.” and realize when you go through your bills that every wasteful thing that you have spent money on in the past that you don’t really enjoy, is earned money.

Don’t dwell on the money that you have wasted in the past.  Focus on your debt free future.  I was paying for auto renew memberships that I didn’t even remember.  Never again.

I began to explore our current consumer culture and why we buy what we buy.  This helped me understand why I was spending so much money shopping.  More on Consumer Culture here.

 

5. Negotiate Discounts:

For those services and memberships that you like but would like to pay less for, you need to contact the merchants and ask for a discount.  Yes, you can do it.  And yes they will give you discounts on your memberships:  Cell phone carrier, cable company, Satellite radio etc…  I have written a whole post about How to negotiate Discounts.

 

6.  Create an Emergency Fund: 

It’s easy to fall into debt when unplanned emergencies happen.  Unfortunately, life is full of unplanned emergencies.  That is why you need to set aside an emergency fund of at least $1,000 to start.  I have written an article on why and emergency fund is so important,  An Emergency fund is an umbrella for your life.

 

7. Increase your Income: 

For most people it’s time to increase your income.  When I got really motivated to pay down my debt, I wrote financial articles for a financial blog and created this blog.  Want to start a blog?  Read 7 Rules for a Profitable Blog here.

Side Hustles:

You may want to find a side hustle or side income.  I’ve written a number of posts about the best ways to increase income.

45 Ways to Boost your Income is one example.

11 Best Sources of Side Income for 2018

 

8. Stay Motivated:  I found reading the book, The Total Money Makeover by Dave Ramsey to be incredibly helpful.  Yes, it lays out the framework he used to be become debt free.

But, the big benefit of the book is it gets you fired up to get out of debt.  It is very motivational.  And that is really helpful on the debt free journey.   More about the Total Money Makeover here.

 

 

9.  Keep Making Progress:

I was amazed at how much money gets through the cracks.  In reviewing my credit card bills, I realized I was paying for all of these items that gave me no value.

• multiple anti-virus recurring charges,
• membership to a sporting goods VIP club I didn’t remember,
• delivery charges every month
• an expensive storage unit
• bank fees

These are all credit card charges that gave me no value, but I was paying for.  And I was paying because I was too busy to pay attention.

But, this stops today.  I’m taking control of my money.

When I canceled the VIP club the woman said, “Oh we’re sorry we charged you for our VIP club when you haven’t made a purchase in 3 years.”  Yeah Right.

Here’s the truth:

“Were sorry to see you go because we make so much money off people too busy to pay attention to their credit card bills.”

 

 

Related articles you may enjoy:

How it all began.  What made me say enough.

44 Ways to Create Extra Income

Getting results on your debt free journey

 

Conclusion:

Today I realize it’s not about the money.  It’s about the control.  It’s about knowing that every dollar I make is mine.  No waste. No exceptions.  Nothing lost.

“A part of all I earn is mine to keep.” – The Richest Man in Babylon

Every dollar belongs to me and if I spend it, it’s on something that really adds value to my life.  And that principle is important whether you make $50,000 a year or $500,000 a year.

So, I’ll keep going.

I’m taking control of my money.

 

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