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For some people, paying off their debt is pretty cut and dry. They make a plan, stop spending and get the job done. For us, it hasn’t been so cut and dry. We started with a boat load of debt. We realized that there were many emotional reasons we were spending beyond our means and had to work to uncover and heal them. And we had to figure out ways to help pay off debt that worked for our individual personalities and for our family.
What I mean by that is that some people make a plan to stop spending in all areas, move to a trailer, sell everything they own but their bed and just kick it on their debt. I’m SO impressed with people who do things so intensely. But as Ruth spoke about on Fruclassity, you need to know yourself and make a debt payoff plan that works for you and yours. Our debt payoff journey wasn’t just about getting debt free, it was about getting debt free in a way that protected our family and helped us to heal from the financial mistakes we made and from what caused us to make those financial mistakes.
For a long time we felt guilty for not giving away our pets, selling our home and living in a tent to kick the debt to the curb ASAP. But we also knew that we were going with our guts and doing things the way we felt led to do them. I’m a big believer in instinct, and we wanted to crush our debt without destroying our family. So we made a plan that works for us and the plan is working.
Here are seven of the things we are doing that are helping us to pay down our debt without living in a van down by the river.
We Figured Out Ways to Increase Our Income
With such a high debt load we knew we had to increase income to get things done. Rick started picking up overtime hours whenever they were available, and I started to research ways to make money online. There are a million ways to make money via side hustles and online avenues, but I knew I had to find the ones that worked best for me and our family’s schedule. I chose two options:
- Making money by freelance writing for others
- Making money by blogging
Ironically, by starting a blog and learning how to monetize it, the freelance jobs came automatically as a result of that. Because I had started a blog and showed off my writing skills on the blog, people who needed freelancer writers started knocking on my (email) door. Ninety percent of the freelancing work I’ve gotten came without me doing ANYTHING but answering an email request. And as a bonus, I’m making thousands a year off the blog as well.
You can find a side hustle job that works for you as well. Here are a couple of books that can help you do that. Increasing your income will give you more cash to put toward your debt so that you can pay it off sooner rather than later.
Side hustle ideas by the side hustle pro, Nick Loper: The Side Hustle Path: 10 Proven Ways to Make Money Outside of Your Day Job (Volume 1)
Another great side hustle book: Hustle Away Debt: Eliminate Your Debt by Making More Money
We Switched to a Better Cell Phone Plan
For us, a part of good prepping is to each have a cell phone. That way we can be in contact if the SHTF even if we’re not near land lines. I shudder when I think of what we were paying for cell phone usage before we switched to Republic Wireless. Now that we’ve made the switch, we spend over fifty percent less for our cell phone usage than we were with our other carrier. We pay about $13-$15 per person for our cell phones now when you include taxes. That’s because Republic Wireless has this awesome plan that pays you back for unused data. The less data I use (wi-fi usage is FREE), the less my cell phone bill is. Switching to Republic Wireless (or whatever other cost-effective plan you can find) will result in a permanent income increase that will give you more cash to pay off your debt.
We Track Our Spending
People often brush this step off but I cannot under-emphasize what a powerful tool spend-tracking is. When you know exactly what you’re spending your cash on each month, you have to come face-to-face with your spending choices. While this may not sound fun to some people, facing up to your money waste is exactly what will help you to spend in a way that will help you grow wealth instead of squander it. Yay for financial freedom!
Recommended Reading: The One Week Budget: Learn to Create Your Money Management System in 7 Days or Less!
We Embrace Frugality
We used to look at frugality as a punishment of sorts. “Oh, woe is me. I’ve made this financial mess and now I can’t do A, B and C ever again until the debt is paid off.”
Now we view frugality as a means to achieve our dream of financial independence. And we’ve learned that it’s possible to be frugal without crossing the line over into cheap.
Frugality simply means choosing to spend your money on what’s most important to you instead of wasting it on mindless stuff that’s not really important to you. For us, mindless stuff meant going out to eat and picking up the cute stuff we saw at the big box stores just because “it’s only $5, or $10 or $20.” It was that nickel and diming that got us into debt, and now we’re saving those nickels and dimes and it’s getting us out of debt.
Recommended Reading: FrugalityPays: Money Saving Tips For The Underachiever
We Stopped Caring What Others Think
This one was huge for us. We both grew up thinking that other peoples’ opinions of us mattered, and we often made spending decisions based on those opinions. Once we stopped caring what others think and started making our financial decisions solely on what was best for our family, the debt started decreasing at a faster rate.
Recommended Reading: Love Your Life, Not Theirs: 7 Money Habits for Living the Life You Want
We Assess Our Plan Weekly and Change Things if Necessary
Can’t emphasize this one enough. We are constantly assessing our plan, seeing what’s working, what we could be doing better and monitoring our spending for waste. When we find an area in which we can spend less, save more or whatever, we implement the change. We keep on working and trying different things until we find a system that produces maximum results.
We Embrace Continuing Education
Part of where we get new ideas to implement is by continually reading books, reading blogs and looking for other avenues of financial education. We figure the more we know, the faster we can get the debt gone. And it’s working. If you want to improve your finances, turn off the TV, put down the smartphone and start reading!!!
Recommended Reading: I Will Teach You To Be Rich
More from Ramit Sethi here at his blog. Ramit’s blog is one of the leading PF blogs out there.
Which reminds me: we don’t just educate ourselves about debt payoff. We educate ourselves about how to grow wealth and manage wealth too. We’re preparing for that day when the money is flowing in big time by learning how to get it flowing in and how to manage it when the flow starts increasing.
Money isn’t everything by a long short, but the more financial independence you have, the more freedom you have to do the things you want to do and to spend time with those you love. Start working your way to financial freedom today!
What is the biggest thing you’re doing that’s helping you to pay off debt and/or build wealth?