Yeah, I know the title of this article is a little jaw dropping but paying off large amounts of debt is possible with a little bit of delayed gratification. Here is our story…
Towards the end of 2018, I knew that we needed to make some changes to our financial lives in order to make our futures better. Here is the estimated breakdown of our debt totaling roughly $90,000:
Student Loans: $39,000
2 Car Loans: $45,000
Credit Card: $4000
Medical Bills: $1600
The student loan crisis that has been affecting many Americans, young and older, really pushed me to think about my personal finances and break away from the debt handcuffs. I began researching ways to get out of debt quickly and the best methods to use. I found that YouTube videos based on this topic gave the clearest advice and even created excitement for getting out of debt. In particular, I listened to Dave Ramsey and loved his “beans and rice” approach to getting out of debt. I played his videos so often that even my husband jumped onboard to getting us out of debt and began to take it seriously. (It is super important for your spouse to be a part of the debt clearing journey which I will discuss in another post at a later date).
Now, 2 years later, we are debt-free and have a fully funded emergency fund. Although stressful, we learned a lot of important lessons to help achieve our goal and below are a few tips that I have gathered during the process.
Budget, Budget, Budget!
Honestly, I had no desire to budget and would just check our accounts to ensure we had money for fun stuff after paying bills. Although we were not heavy spenders, we would have money just sitting in our checking accounts without putting that money towards paying off our debts. After writing our income and expenses down, I realized how much money we could actually put towards debt and pay it off in a timely manner.
It is important to document what your sources of income are and where that money is going each month. Your spouse should also be heavily involved in planning the budget for the household. I learned that budgeting for literally every dollar you earn was the most sufficient way for us in getting out of debt quickly. Budgeting does not have to be difficult. Visit the GIG Store for tools to help you get started.
Home Cooked Meals
Preparing home cooked meals with my husband was a huge money saver during our debt free journey. We eliminated our usage of food delivery apps and increased the amount of healthy food we bought at the grocery store each trip. The groceries you buy should be filling and keep you full, like vegetables, fruits, pastas, rice, nuts, and lean meats. When snacking on chips or something similar, we would become hungrier in a short time later. Budget for your grocery shopping trip and buy healthy foods that will reduce the amount of times you order take out. Also, check out your local farmer’s market for awesome deals to save money. Cooking meals at home does not have to be expensive and it is quite fun!
Increase Your Earnings
Increasing your earnings may sound tough but there are many ways to increase your earnings in order to pay off debt. We utilized side hustles like food delivery services and used our company bonuses and commissions to assist with paying off debt. Maybe you thought about picking up extra shifts at work, selling some items in your closet, or driving for ride share apps to increase your earnings. I am here to say that all of those options and more are steps in the right direction to paying off debt early based on my experiences.
I wanted to place emphasis on utilizing bonuses and commissions from your job to help pay off debt. When receiving bonuses or any kind of additional income outside of our regular pay checks, it may prompt us to spend that money on a luxury item or something we have been wanting. It is important to practice delayed gratification and use that money to pay off debt to improve your financial situation. Once that debt is paid off, there is a lot more money available to buy those items you have been wanting.
During our debt free journey, I began to feel the fear of missing out (FOMO) and social media exacerbated that feeling. I am not sure if my husband had the same feeling, but I definitely did. When you see people out on vacations and buying luxury items, you may feel self-conscious about your current financial situation. This is nothing but a recipe for disaster and can lead to further debt as you are trying to get out of debt. After listening more to Dave Ramsey’s podcast, I found out that many people are actually broke or in debt and try to “keep up with the Joneses”. This is not always the case however, I was able to continue to navigate through our journey of being debt free knowing that what I see on social media does not always reflect one’s financial situation. Also, I developed that “mind my business” mentality to only focus on myself and my family.
These four tips helped us and I hope it will benefit you and your family as well! Comment below and tell us about your goals.