Have you ever looked at your debt and felt like you were being crushed by the weight of it all? My breaking point with debt was after we got a car through financing. I cried when my first car payment came out of my bank account. Unfortunately, it was too late, I was locked in and had accumulated over 100K of debt.
At that point, I decided to destroy my debt, but in order to do that I needed some extra money to put towards it! My main course of action was to lower my expenses so that I’d have extra debt fighting cash. By looking at a complete list of all mine and my husband’s expenses and bills, I found a lot of waste. We were paying $200+ on a photography class, $150 on phone bills, and upwards of $250 on gas for our car. This started a “bill” purge. I cut out over $700 worth of bills, and smartened up about our expenses.
I strongly encourage you to push yourself with your monthly bills. We pay $30 a month total for our phones because we thought, there’s wifi practically everywhere now, could we save money by getting rid of data? Turns out, we don’t actually need data, we just thought we did. We continued pushing and questioning each bill and followed this idea of living with less until we had more room.
With this extra room, we saved up an emergency fund and now dedicate all our extra money to our student loans.
This month alone we paid off $3,330 in debt (to see a breakdown, click here). That’s 72% of our income. We’ve worked up to this number, a 70%+ savings rate doesn’t come in one day. Our debt payments have grown bigger and bigger as we’ve made progress.
You might notice how we lowered our bills by $700, yet paid off over $3000. After we lowered those bills, we realized that we were living a very excessive lifestyle. This required some sacrifice though. We had to really push ourselves to get to the point where we could cut back. I used to use 6GB of data on my phone plan every month, and we cut back to 0GB. We also lowered our internet plan from unlimited GB to just 100GB. We stopped using our car, completely. I started budgeting everything through the app You Need a Budget, so that we stuck to our debt goals and spending goals. All this allowed us to cut back even more than we thought we could.
You don’t have to do this all at once, everyone starts somewhere. We started with simply making minimum payments. Then an extra $20 here and there, and eventually we got to where we are. We picked the debt that provided the quickest updates, so we could actually see our debt going down.
If I had one point I wanted to make it’s that in the debt repayment game, you need to keep motivated. Getting out of debt requires sacrifice and strategy; set little goals for yourself and pay off debts in a way that shows you progress. You don’t have to do it exactly the same way I did, and that’s okay. But, I guarantee that it’s an ongoing challenge to get out of debt as quickly as possible, and you can bet your bottom dollar I’m going to win that challenge, and you can too.
If you want to learn more about my debt goals and how to lower your bills, head over to my blog.
Young & Financially Free