Let’s not waste time with an intro… be it student loans, medical bills, credit card debt, we’re all sitting on payments for money we borrowed, and it can feel like a burden. If you’re ready to get it behind you, follow the methods below. Fair warning… it’s not for the faint of heart.
Squash Small Bugs First- We’ve talked about this “Snowball Method” before, but as a refresher: take all your debts and organize them from smallest to largest. Make minimum payments on all but the smallest, and for that loan, pay as much as you can. When that debt is gone, roll that payment into the next smallest while maintaining minimum payments on all others, and so on. By eliminating smaller debts, you’ll have more resources to attack the larger ones instead of treading water attacking them all at once.
Leave No Dollar Unaccounted For – Make a budget down to the dollar. THE DOLLAR. Every trip to the grocery store, every coffee, every buck going into savings… write it down. Everything that you don’t need to spend to survive (food, shelter, etc)? Put it towards loans. This is your gospel now. If you stick to a zero sum budget, you’ll have less room for frivolous purchases.
Stitch Up Wounds – Look for anything that may be costing you money over time. A daily coffee trip? Remove it. Hulu and Netflix? Only keep one. Orange Theory membership? Go to the gym in your apartment complex. These smaller expenses can be like blood loss: even a small wound can become fatal over time if it isn’t treated.
Live Below Your Means – Anything that isn’t crucially imperative to your survival is an unneeded expense. If you eliminate those expenditures, you should. Have a two bedroom apartment, using the second bedroom as a home office? Next renewal, get a one bedroom. Have two cars? Get rid of one. Planning on a lavish vacation? Not this year. If you are spending money that isn’t directly going towards staying alive, it can be rolled into eliminating those debts faster.
Just Say No – Beers after work, meals out with friends, spontaneous road trips… you’re going to see just how many small expenses pop up because of the people around you. Get used to telling people that it doesn’t fit in the budget right now. You’ll be happier when those debts are gone, and free to attend all you desire.
You’re In Control– Your friends and family love you… remember that when they keep bugging you to do things or bend your budget just this one time. You’ll feel like the weight of the world is on your shoulders, that things are outside of your control. Not true. You have this. Exercise your power of will and you’ll be amazed how in control you are.
Give it Everything – Every dollar. Every spare cent should go to your debts. It’s going to hurt. You won’t have fun. You’ll want to give up several times, and a few times, you probably will. But stick with it. Put everything into it. If you’re serious about getting these debts behind you, you’ll need to make sacrifices. But there’s no better way to remove those burdens and get on to living your life debt free.