5 Things I Did to Get Rid of Debt
1. Create a budget (see last week’s article on how to do this)
I always thought a budget was for poor people that needed a plan. Which ironically was me but I didn’t think so at the time. By writing down your plan ahead of time you are able to ensure that you aren’t spending more than you make and that every penny is going towards your goals.
2. Pay extra on current debt
This may seem like an obvious one but you’d be surprised. Use your budget to determine how much you can afford to pay extra each month and make that payment first! When we make debt payments at the end of the month life gets in the way and we don’t pay as much as we had originally planned. By comparing my spending habits with my income I was able to see how much I could afford to pay extra on debt with my current lifestyle. No matter what my income was each month, I would always pay the same amount towards my debt.
3. Don’t sign up for new debt
I had to call this one out because our society normalizes debt to an extreme, we even have “good debt” and “bad debt”. Debt is debt. Period. Depending on your personal goals you may want to eliminate certain debts before others but to truly build wealth, don’t take on new debt.
4. Get a side hustle
Everyone should have multiple streams of income coming in, it’s a safety net in case something changes with your job. Increased income doesn’t mean increased lifestyle. Send extra income towards your debt or use it to pay for larger purchases in cash. While I was paying off debt my side hustle was waitressing. It was dependable easy cash and I had been doing it for so long I could do it in my sleep.
5. Have some real (and sometimes hard) conversations with yourself
Personal finance always involves self reflection. Whether you make a lot of money, or have a smaller income, can you afford the lifestyle you currently live? I am going to guess no if you have debt. Do you need to cut subscription services? Do you really need a new phone every two years? Small lifestyle changes add up and make a large impact towards paying off debt.
