Do you want to pay off debt once and for all? Many people never pay off their debt, whether it is credit card debt or student loan debt. It can be challenging to pay off your debts when you are living paycheck to paycheck. But by following the proper steps, anyone can get out of debt. And never have an avalanche of personal debt again!
To start paying down your debt, you need a budget that will allow you to do so without going into even more financial trouble! This blog post will provide some simple steps that will help you create a budget that you can live with and pay off their debts in no time at all!
- What is debt, and why pay it off?
- The different types of debts
- Make a budget that sets you up for success.
- An emergency fund makes this all work.
- Start paying off your debt.
- Find ways to cut costs and live below your means.
- Tips for staying on track with the budget you've created
- Prioritize spending money on what's essential to your four walls
- Ways to earn more money while paying down debt.
- When to work with a financial coach to pay off debt
- Debt payoff calculator-A.K.A. How long will it take you to pay off your debt?
What is debt, and why pay it off?
“Debt” is money that you owe to creditors. You can have credit card debt, student loan debt, or car payments (to name a few). Debt costs more than just the monthly payments – it also takes away your ability to pay for necessary items as food and rent. It might not seem like paying off debts will make a difference, but it will, and you will have a brand new life to live once you do.
The different types of debts
There are different types of debt that people can have. The three most common ones include credit card debt, student loan debt, and car payments.
Paying off Credit Card Debt
Credit cards can be an easy way to finance a purchase, but they also have higher interest rates, making it harder to pay off the balance. Credit cards make it easy for you to pay a minimum payment, but before you know it, you find yourself in credit card debt payments.
If you have a lot of debt on your credit card or not enough money to pay off the balance, then it is time that you start paying them down! You might need some help from a financial coach.
Paying off Student Loan Debt
Student loans are a highly discussed topic, but they can also be an enormous burden on the borrower. Many borrowers pay 6 to 8 percent interest rates, and that doesn’t seem like much until you realize how quickly it adds up over time! It is challenging for students to pay back their debt while paying for other things like food and rent.
Paying off car payments
It can be challenging to have a high-interest rate car loan and not have the means to afford it. This blog post will provide some basic steps that you should follow to pay off your debt once and for all.
Make a budget that sets you up for success.
If you’re not sure how to pay off your debt, then this is the first thing that you should do. Creating a monthly budget is the key to paying off your debt. It is essential to pay attention to what you spend your money on and how much money you have leftover each month to live on.
Make the best use of what you have.
If you’re not sure how to pay off your debt, then this is the first thing that you should do. Creating a monthly budget is the key to paying off your debt. It is essential to pay attention to what you spend your money on and how much money you have leftover each month to live on.
Create a realistic budget plan
Your budget needs to be realistic, but it also needs to show you exactly where you come up short. Don’t be afraid to ask for help. Many people think they can do this all by themselves without any outside assistance, but many financial coaches will work with you and create a reasonable plan. Stay motivated, and don’t get discouraged!
It won’t be easy at first, but it will pay off in the end. When making your budget, be sure to include all of the monthly expenses such as car payments, student loan repayments, credit card bills (and any others). Be honest with yourself when creating your budget. It will show you where you overspend and where you can save to put additional funds towards your snowball payment.
Develop the right habits
It takes time for you to develop good money management skills, but with practice, it can happen. These simple steps below will help you develop these essential habits.
An emergency fund makes this all work.
Before you can pay off your debt, you need to have an emergency fund set up. If you have not already, go and open a separate bank account for your emergency fund. You need to save $1,000. Once you achieve this goal, you are ready to start paying off your debt. Creating your fund could be challenging, but you can quickly save the monies by creating a budget. And make sure you stick to it.
Start paying off your debt.
First, create a list of your debts from smallest to largest balance. Your smallest debt should be the first one you pay off, either by simply paying it in full or adding additional monies above the minimum monthly payment(this will start your debt snowball). By paying off your smallest debts first, you’ll build up momentum in your debt-free journey quickly.
Continue to pay the minimum payments on the larger balances each month. Once your smallest debt is paid, take the payment you were paying on that debt and apply that payment to the next debt (next largest balance). And as you pay off each debt, keep rolling those payments to your next largest debt. Don’t forget to celebrate when you pay off debt! You are that much closer to your dream of living a debt-free life!
Find ways to cut costs and live below your means.
Now, you have a budget in place, you have your emergency fund fully funded, and you are paying off your smallest debts. Stay focused on your monthly spending habits! Ensure you are reviewing your budget monthly and making the necessary adjustments to your spending if needed. By doing this, you’re helping yourself pay off your debt much faster.
Tru Tip: We all have stuff sitting in our houses. Those things can be sold online at websites like eBay, Etsy, FB Marketplace, and Craigslist, to name a few. Whether it is $100 or $400, could those additional funds not help you out? I know it sure helped me and still does today.
Tips for staying on track with the budget you’ve created
My tips for staying on track with the budget that you’ve created are:
Tip 1: Make your financial goals explicit. By doing so will help you stay motivated.
Tip 2: Write down your budget and post it somewhere visible, like your fridge or a wall.
Tip 3: Have an accountability buddy. Share your progress with them. And reach out to them when things are going well and if you are having a moment of weakness. I had one, and he made my journey so much easier!
Paying off debts isn’t easy, but it is possible. It all starts with a simple budget and some good habits that you can develop over time.
Prioritize spending money on what’s essential to your four walls
The advice I can offer is for anyone trying to pay off their debt once and for all is to prioritize what you spend your money on. I know this may seem counterintuitive, but it does work wonders. I started taking my monthly budget and spending money on essential things in my four walls (home, car, health, utility bills). There was no extra fluff in my budget for fun! I wanted to pay off my debt quickly.
Prioritizing on what’s vital to your four walls doesn’t mean that you can’t go out or have fun, but the more you focus on paying off your debt, the quicker you get to enjoy your new life.
Ways to earn more money while paying down debt.
1) Boost your income. Earn more with a better-paying job, side hustle, or small business.
2) Spend less. Figure out your wants versus needs. Adopt the “spend less, live more” mindset.
Tru Tip: If you find yourself spending more than you’re making, look at your monthly expenses. I went without cable and not going out to dinner for several years. It was worth it! Evaluating what expenses you can eliminate to help pay off debt sooner will be essential. As the economy continues to come back we are starting to see inflation. And it will affect your buying power!
My best piece of advice for paying off debt once and for all is to be persistent! So do not give up! You will get there!
When to work with a financial coach to pay off debt
With a financial coach, getting out of debt is possible. This person will help you break down your goals into manageable steps and offer support in good times and bad to make a life that’s consistent with your values – one where anything feels possible.
I wasn’t sure how to pay off debt, and I wanted to pay it off once and for all. I started searching for a financial coach. What is a financial coach? I learned that a financial coach could help me pay off debt and create some good money habits to utilize for the rest of my life.
If you’re looking to find a financial coach, there are various ways to do so. First, ask friends and family members for recommendations – they’ve likely encountered their fair share of challenges themselves and may have a contact that can help. Secondly, look for accredited coaches on the Financial Coaching Association website.
Begin by researching all of the financial coaches in your area. Please take note of their qualifications and what services they offer. Find a coach who specializes in your areas of need.
Debt payoff calculator-A.K.A. How long will it take you to pay off your debt?
The question everyone wants to know. How long will it take you to pay off your debt?
The answer is different for everyone. Paying off your debt depends on your interest rates(average), your monthly budget, and how much total debt you owe. Lastly, how motivated you are to be free of your debt and start a new life!
One thing I know for sure is this. Getting a personal loan to pay off your debt is not the road you want to go down. I got a personal loan and rolled several credit cards into it, and I ended up paying more in interest over time than just using the debt snowball.
Unless you have a credit card with a zero balance and offer a balance transfer option at 0%(and you can pay the entire balance off before the 0% period ends), then stay away from personal loans and opening up new credit card accounts. Best credit card to pay off debt = NO WAY!
But I digress. You can use pretty much any debt payoff calculator that is out there. Just put in the magic words into “Google” and Bamb there are 100’s right at your fingertips! Ask your financial coach for one they recommend. For me, I found one that was straightforward to use. It was from Ramsey Solutions. I signed up for their Ramsey+ service. I do not recommend any specific product or service!
To wrap all this up, paying off debt takes discipline, time, and patience. You want to pay it off once and for all because you deserve the freedom of being in control of your finances! All of the sacrifices you make today will pay off in the end. Just envision living a debt-free lifestyle and everything you want to do now that will be possible. Always keep your goals somewhere in sight! And when things are tough, look at the end goal and be reminded of what you’re fighting for! Keep Fighting, and I wish you all the best in your journey!
I close with a quote I live by daily “Success is more attitude than aptitude.”
