Guest post from Erin of The No Drama Mama
When I was a little girl I remember bountiful Christmas mornings, but I also remember many occasions on which our lights or cable were shut off because of overdue bills. I remember the constant calls by debt collectors and being warned not to pick up the phone. All of it made an impression on me.
Although I didn’t make the connection clearly until years later, I got the point that we weren’t on a good financial path.
As an adult, I felt that as long as I wasn’t chased after by bill collectors, I had achieved some sort of financial success — but that was only one part of the picture.
It took enough mistakes with credit to make me realize that we would NEVER be successful without first getting out of debt.
Here are 6 surprising strategies that have helped us pay off over $20,000 of debt on one income:
1. Ditch The Debt Denial
Sometimes we don’t even want to know how much debt we’re in. That denial keeps us comfy and cushioned from our mistakes and allows us to play the “I pay the minimum balance” game, which keeps us focused on making payments instead of paying off debt.
The first thing you have to do is get real with yourself and your spouse. Lay it all out, every balance, every minimum payment and look at it. If that doesn’t get you fired up to see how much money you’re spending each month on stuff you already “own” I don’t know what will.
2. Find a Financial Guru
I looked to Dave Ramsey and Suze Orman for advice when I was first staring down our mountain of debt.
Get to the library and check out what the experts have to say. Follow them on social media. Follow their blogs. You’ll find helpful advice and inspiration to keep pushing you forward.
3. Get An Emergency Fund… Stat!
Why does Dave Ramsey tout this as Baby Step #1? Because life happens: cars need repair, hot water heaters go out, and unexpected trips to the ER are necessary.
We don’t know when or where these things will happen, but I guarantee you they are coming.
In our second year into paying off debt, we had both cars taken out of commission in the same week. Without savings, you’ll go running straight to credit to bail you out.
4. Start Small
It might seem counter intuitive to pay off the smallest balance first. Why not start with the highest payment or the highest APR? It’s because we’re creatures who need constant motivation.
If we go years before we see our first debt erased, most of us will quit before we get there. Get some quick wins by erasing small balances first and you’ll want to keep going.
Similarly, when you’re looking for ways to cut your budget, start small. Start by giving up things that don’t hurt so much, like eating out once a month, the manicure, or the subscription you don’t use anymore.
5. Stop Thinking that Saving Money Is the Answer (by itself)
You can save all the money you want, but if you don’t apply those savings toward your debt, it’s going to fall through your budget cracks and get spent on other things.
Put together a debt repayment plan. It will help you see at a glance what debt you have, what money you’ll use to pay it off and the time frame it’ll take you to do it.
If you love charts, by all means do those, too. Whatever motivates you will keep you moving forward during setbacks.
6. Get Excited!!!!
Looking at debt repayment as a chore will get you nowhere. I know it can be hard because it seems daunting when you’re in a lot of debt. It’s probably going to take you years to get out. However, you didn’t get in debt overnight, so can you really expect to get out that quickly?
Instead, try to find joy in it. I think of each debt gone as one less link in the chains that bind me and our family.
I know some people can’t even imagine what it would be like to be out of debt, but I URGE you not only to imagine it, but to know it’s going to happen. Let that thought take up residence.
How much debt have you paid off and how did you do it?
Erin Johnson, a.k.a. The No Drama Mama, can be found blogging at The No Drama Mama when she’s not wiping poop or snot off her otherwise three adorable kiddos. This frugal, “tell it like it is” mama has NO time for drama, so forget your perfect parenting techniques and follow me on Facebook or Twitter for my delightfully imperfect parenting wins and fails.