Getting Results on the Path to Debt Free

 

The steps you need to take to become debt free are pretty simple:

 

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 in a box or drawer somewhere.   By getting organized, you will be able to Take Charge of your personal finances.  You wont need a personal loan or any debt consolidation.

Right now, I’m reviewing my year end credit card statements and I see so many charges that I’ve cut out.  And I feel great about all the money I am no longer wasting.  But part of me is calculating how many thousands of dollars that I lost simply by not paying attention. 

Read more about the dumb stuff I bought last year.

 

 

• Disclosure: My aim is to recommend products that will truly benefit you.    I believe in transparency and want to disclose that I’ve included certain products and links to those products on this page that I will earn an affiliate commission for any purchases you make.

 

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.

 

Make sure you’re getting discounts and cash back:  I use Ebates and they give me cash back for nearly all of my purchases.  Ebates gets a commission from stores you shop at and they share the commission with you.  Average cash back is about 7%, which is great.  Right now, they are offering a Free $10 Gift Card when you join and spend $25.  More about Ebates Here.

 

 

 

3. Eliminate wasteful spending.

I was wasting nearly $100 per month on a storage locker.  It made me so angry that I eventually began this journey and started writing this personal finance blog.

“A Part of all you earn is yours to Keep.” – Richest Man in Babylon.

Realize when you go through your bills that every wasteful thing that you cut out is earned money.  Don’t dwell on the money that you’ve wasted in the past.  Focus on your debt free future.

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 our Consumer Culture.

 

Relevant Articles:

45 Ways to Increase your Income

9 Best Ways to Save $7K This Year

11 Legitimate Survey Sites for 2018

 

4. 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.

 

 

 

5.  Create an Emergency Fund: 

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’ve written an article on why an emergency fund is so important,  An Emergency fund is an umbrella for your life.

 

6. Increase your Income:  Everyone wants to increase their income.   When I got really motivated to pay down my debt, I wrote financial articles for a financial blog and created this blog.  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.

 

7. 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.   Read the Amazon reviews here.

 

The path to life after debt:

The only way to assess your current situation is to take the time to understand where your money is going.

I compiled a budget which allowed me to tell my money what to do instead of wondering where it all goes.

Read 7 Helpful Tips to Creating a Budget here.

It was time to be debt free. Here are some of the action steps I took:  My advice: Take Action!

• I closed my storage locker.
•  I switched to a less expensive  gym.
• I negotiated a discount on my XM Satellite radio.
• I made some extra money when I sold a bunch of my stuff on Ebay.
• I reviewed my credit card purchases.
• And I started taking control of my money

 

That was my debt reduction plan.  And you can do it too!  I cut back on every purchase I wasn’t getting maximum value from.  I cut out dumb spending.  And each month I was able to save and invest much more of my money.  It was time to take control of my finances.  That’s the process of how to become debt free.

 

 

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

 

Debt Success:  My bank account balance was growing steadily into April.  And then on April 15th, my bank account went flat.  All gone.  I had to pay my taxes and it was pretty discouraging.

But here’s the thing.  I wasn’t discouraged because I knew the process of becoming financially free was working.  My bank account showed little in the way of results.  Yet, I knew that the process was working and I would accumulate more money in my bank account over the next few months.

 

 

 

This will set me on the path to becoming debt free and retire early.  But, there is a lot of work to do.

My setback was caused by taxes.  But everyone has financial setbacks while cutting back and reducing debt:

Setbacks are part of life.  That’s why you need a buffer in your budget and an emergency fund.

Focus on the process to become debt free.  Once you’ve begun to make these changes, the process will create results.  You’ll begin to see results and will be able to visualize the day when you are debt free or able to retire early.

 

 

But in the beginning, focus on the process of debt reduction.  That’s how you will get results.

And Keep Going!

 

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