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Getting Results: How I paid off $17K this year

December 28, 2017 by Frugal Prof

How I Paid off $17K in debt this Year

Your life as a business

It may seem unsentimental to think of your life as a business, but it is. The fact is, every year there is a profit and loss to your financial life. You’ve invested a year of your life and what do you have to show for it in financial terms?

Are you closer to your goals?

Are you closer to a comfortable retirement?

Are you building a financial foundation?

Are you still in debt?

For many years, I was running in place. Instead of building a financial future, I was spending to make myself feel better today.

And my income would solve all of my financial problems. Or, so I thought.

*Affiliate Disclosure: This page may contain affiliate links to companies I have a business relationship with. The reader is never charged and I strive to only discuss companies that offer value to my readers.

Looking back at this Year:

Looking back at this year, It’s easy to forget how much progress I’ve actually made.

My finances are back on track,
I’m debt free,
and my car is paid off.

I’ve tried to chronicle my decisions both good and bad the past year. I became discouraged over the summer and I hit the wall after I had to miss a U2 concert because of a tax payment.

I was used to spending whatever I wanted, whenever I wanted. So, planning my purchases and delaying gratification was a sacrifice I made this year. I make a good amount of money, but my spending was always going to limit my net worth.

I made big strides this year. But, I’m not going to lie to you. It was hard. I put in a lot of work.

Relevant Articles:

45 Ways to Increase your Income

9 Best Ways to Save $7K This Year

11 Legitimate Survey Sites for 2018

Here is the playbook I used. It’s simple and straightforward.

Take Action:

I negotiated discounts on all of my recurring charges.
I switched to a less expensive gym,
I sold nearly $500 of my things on Ebay.
I stopped using a storage locker.
I started writing this blog.

Coming to terms with my spending habits: I tried to understand where my money was going. I tried to slow down and learn why I wanted the stuff I was buying. I learned to budget. I set small financial goals and I hit them.

I cut back. And I cut back even more. I paid attention to every single penny. I paid attention to purchases that created true value in my life. And those that added minimal value, I cut out.

“If you can’t measure it, you can’t improve it.” –Peter Drucker, Author and Business Consultant

Get organized: Creating a budget. I created a budget using a free app, Everydollar.com. It’s a very good app, but I didn’t keep using it. What worked well for me was old school: keeping a notepad next to my credit card bills. And keeping track of the good, the bad, and the unexpected in my monthly bills. I was also keeping track of my bills in my head because I became VERY focused.

Read my post, 7 Tips To Help you Create a Budget here.

Take Action: I negotiated discounts with almost every company I was doing business with. I got discounts. I got price reductions. Ask for what you want. Make sure you aren’t overpaying for the services you’re using. Or cancel them. I cancelled my storage locker. I was paying nearly $99 a month to store items that I didn’t really need or want.

Results: Savings of ~ $600/ month. Total gain $6,000

Create Extra Income: In my opinion, the easiest way to create extra income today, is to sell your excess stuff on Ebay. It’s fast, easy, and convenient. Within a week or two, you can have money coming in. Also, it makes you realize how quickly our purchases lose value.

Results: $493 from EBay in one month.

Side hustle/ Create more income: I started writing an investment column for the website, Seeking Alpha. This was a side hustle. And it fit my interest in the stock market and as a writer. I wrote 78 articles for their site on undervalued stocks and those articles have received over 288,000 page views. I was paid more than $5,000.

44 Ways to Create Extra Income

11 Best Side Hustles in 2018

Trade time for money

Use your time to create income, not more expenses.

According to a New York Times article entitled, How much Do we Love TV?, the average American spends 5 hours and 19 minutes of television per day. When I decided to get motivated, I realized that I preferred being active and trying to earn money instead of being passive and watching television.

At the very least, get paid for surveys while you watch TV. Some pay up to $20/ Hour. (More info here).

In my opinion, trading time for money will allow you to create the life you want.

Budget: Essentially, a budget is the process of deciding what is really worth your money. I cut out pizza from my budget. Yes, delivery pizza didn’t seem worth the extra $12 compared with the store bought kind.

I decided my fancy gym wasn’t worth the extra $90 per month. I unsubscribed from store e-mails to make mindless shopping less tempting. I started to think about why I buy the things I buy.

Deciding what is worth your money (and your time), is a really helpful exercise. Look at your credit card bills. I cut back on convenience purchases like food delivery. I was spending $44 a month on delivery alone.

Stay Motivated: I’m a big Dave Ramsey fan. He created the debt free genre. And his podcast was very helpful to keep me motivated, especially when I hit the wall on this debt free journey. And if you’re just beginning to get serious about your finances, his book is a must read.

Year- End Results: Budget cutbacks: $6,000 +Side Hustle: $5,000 + Car paid off: $6,000 = $17,000

The benefits: Running my life more like a business means that each quarter and especially at year-end, there is a profit and loss to my financial life. I actually know that I spent less than I made this year. And that I made enormous progress financially.

I paid off my car. I contributed to all of my retirement plans. I paid my estimated taxes on time. I created extra income to speed up the process. I grew both financially and personally.

There is no doubt in my mind that you could have similar results in your own financial journey.

Go for it!

Related articles you may enjoy:

How it all began. What made me say enough.

Why your family needs an emergency fund

Survey Sites That Actually Pay

Getting Results on the Path to Life after Debt

June 15, 2017 by Frugal Prof

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.