Hi! I’m Angel…..and I’m…. in $25k of consumer debt!
I know what you must be thinking…but Angel, how?
I don’t even know how it happened myself…I suppose poor money management and lack of discipline when shopping.
The good news is that I’m taking steps to get myself out of consumer debt once and for all.
I’ve read many books and articles on getting out of debt and I’ve watched countless hours of YouTube videos of people who have successfully gotten out of debt. What I’ve gathered from all of the research is this: everyone is different, therefore, everyone should have their own unique approach to getting out of debt.
I’ve taken snips from all of the “get out of debt” material I’ve scoured over the years (yes, I’ve been in consumer debt for years..probably about 10 now), and I believe doing these five things can help anyone start their journey to debt-free.
1. Know How Much Debt You Have. This one is the scariest, but the most necessary of all the things. If you dont know how much debt you’re in, you can’t set a debt payoff goal date or devise an effective payoff plan that will work best for you. And when I say know how much debt you have, I mean every single penny. Calculate that shit down to the cent. When I did this, I literally cried and wanted to go charge more because I felt like I would never pay off $25,903. But you know what? I had to see how far in I was so that I could stop making my money work against me.
2. Review Your Spending. This was also hard for me to do. I read The Spender’s Guide to Debt-Free Living, by Anna Newell Jones, and she suggests doing a “reverse budget”. I didn’t like that. I put it off for a few months and when I realized my paychecks didnt cover my expenses anymore, I decided to see where I was spending all of my money.
I went over the last three months of my bank and credit card statements and what I saw was unbelievable to me. Are you ready for this? I was spending at least $1,500 over what I made every month! Let me spell that out for you: FIFTEEN HUNDRED DOLLARS A MONTH! That’s $18,000 a year more than what I make. So that explains why my debt is so high, but I also realized that I was spending on unnecessary stuff. Candy for my team at work, clothes I didnt need, miscellaneous household items, alchohol…the list goes on. This showed me that I needed to change how I handled my money. I didn’t stop my horrid spending right away, but this did help me as I got more motivated to pay my debt off.
3. Create An Action Plan You Can Stick To. Sitting down and calculating how long it will take you to pay off your debt is daunting. I tend to see the numbers and feel so overwhelmed that I put more garbage on my credit cards because I think I will never pay my debt off. Or I try to see how fast I can pay everything off by calculating unreasonable repayment numbers.
EVEN IF IT WILL TAKE YOU MORE TIME OR MONEY TO PAY OFF YOUR DEBT, CREATE AN ACTION PLAN THAT WILL WORK FOR YOU! I can’t stress that enough. Make a plan you can stick to. What I decided to do after many failed debt payoff attempts, was to break everything up into small, manageable chunks.
My overall debt with my house, car, student loans, and credit cards is almost $107k. That’s a lot! So I decided rather than tackling all of my debt at once, to break it up into chunks. Right now I’m paying off my credit cards and consolidation loan so I can focus on my house, car, and student loans later on. It’s all about finding out what works for you.
4. Set A Debt Pay-off Goal Date. This has motivated me more than I can say. Just knowing that by January 4th, 2023 I will be credit card debt free gives me so much peace of mind. I even broke up each card into a payoff date. I have my smallest credit card that I’m taking first, followed by my higher credit card, followed by my giant $22k consolidation loan. Keep that payoff date fresh in your mind to remind yourself that you can and will be debt free.
5. Stop Using Your Credit Cards. Remove them auto saved cards on amazon, Walmart, and all of the other retail sites you have them saved in. Anything that is auto charged to your card can be cancelled or transferred to your debit card. Lastly, keep your cards out of sight. I decided to freeze mine in a plastic bag filled with water. This way if I absolutely have an emergency that I need one of my cards for, I can defrost them. You can watch that video on my YouTube channel. Link is below. But trust me, doing this will help you stop adding to the ever growing pile of debt you already have and that is a very good start.
I know I am only beginning my journey to debt-free living, but I’m already off to a good start. I’ve paid off my smallest credit card balance in the first month ($903!) and have completely changed how I look at money.