Being in debt can cause such a feeling of helplessness and entrapment.  When you are facing a ton of debt, at times it can just seem completely overwhelming!  This is where my husband and I were a few years back.

After looking at our mountain of debt from my veterinary school, we knew we had to get rid of it or the rest of our lives would be controlled by it.  This led to me reading Dave Ramsey’s Total Money Makeover. We started following his baby steps to get out of debt.

We got together our $1,000 emergency fund and then started working on becoming debt free.  I was fully on board right away, but it took a little bit for my husband to come around to this new way of living.

Fast-forward to just six short months later and we were able to knock out $35,000!  How were we able to do this?

 

There are 5 major things we did to pay off debt in 6 months:

 

1.  We started using a written budget.

I thought budgeting would be the most painful part about getting out of debt, but it turned out to be my absolute favorite thing.  The budget kept my husband and I focused, on the same page and in agreement about where our money was going.

We had a written plan so all we had to do was follow it.

Once I started paying attention to where all of our money was going, I could figure out where we were wasting most of it and make adjustments to fix it.  It truly felt like we had a pay increase when we started budgeting. We saved our emergency fund super fast and threw every extra penny at our debt.

Budgeting seems like this restrictive and challenging thing, but truthfully, it actually gives more freedom to spend because it is giving written permission to spend your money where you choose to.

When you design your budget together, you are choosing what your priorities are and you are both agreeing on them.  This means, as long as you both stick to the budget, you shouldn’t be fighting about money. Ever. For married people, that is pretty impressive.

 

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2.  We cut our expenses.

Once you have a written budget, you can start to see where you are actually spending all of your money.  This was very eye-opening for us. We didn’t realize how much money we were actually spending on eating out.  It made us question what we really needed in our lives to be happy.

Was the cost of cable worth it?  After taking a full assessment, we made tons of cuts.  If the expense wasn’t necessary for our existence, it was gone!  This meant no more cable, an internet speed downgrade, cutting our grocery budget in half, stopping eating out, canceling our gym membership and stopping shopping for clothes on a regular basis.

We cut tons of expenses but immediately started saving tons of money.  Even with the sacrifices we were making, we didn’t care because of the amount of money we were saving.  These were the top 15 ways we saved a ton of money!

 

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3.  We assessed our life insurance policies.

Prior to subscribing to Dave Ramsey’s teachings, I had a whole life policy from when I was a child.  Dave recommends term life insurance policies for adults because you really only need the coverage in case you die.  To learn more about the difference between whole and term life insurance, read this.

I cashed out my whole life insurance policy for the current cash value and threw it at our debt.  Then we set up our term life insurance policies and haven’t looked back.

 

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4.  We sold everything.

If you are holding onto tons of possessions, you could actually be staring at tons of money.  I went through all of our furniture and possessions to find items we weren’t using, would never use and could live without.  I sold local through the Facebook Marketplace, always felt safe and never had to worry about shipping.

Selling your stuff is this totally freeing process.  It puts life in perspective in a whole new way. You feel lighter and less burdened by “stuff.”  And as a bonus, you make money!

In addition to selling household items, I also dipped into my childhood collectibles to really boost our debt payoff.  For me, that was my American Girl Doll collection from childhood. I chose to sell those on eBay as there was more of a market for them there.  It really wasn’t challenging to set up the account and take care of the shipping.

If you have any collector’s items, check out eBay and see if there is a market for it.  If you are willing to part with some of your stuff, you could make a ton of cash very quickly.

Do I regret selling my childhood dolls?  No way!  They were sitting in boxes, unused, I never would have let my children play with them and they helped us pay off debt!  If I really want them again, I will buy them back when I am debt free. No guilt; just freedom.

 

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5.  We utilized the debt snowball.

In Dave’s debt payoff program, he uses the debt snowball payoff method.  You list all payments from smallest to largest and focus only on paying off the smallest debt first while continuing to make minimums on the rest.  Then when the smallest debt is paid off, you take its payment and roll it into the next debt’s payment.

At the rate we were paying off debt, our snowball kept growing quicker and quicker.  It was amazing! It was so encouraging to really see the progress we were making on our debt.

While we were going through it, I used debt payoff coloring sheets to keep a visual around so we could be encouraged every day.  They hung in our bedroom closet where we would see them every morning. To see the progress was so motivating.

 

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Is debt payoff easy?  Not really because it requires a lot of you telling yourself, “No.”

Is debt payoff simple?  Absolutely! All the extra money you have goes to pay off your debt and you see progress.  It really is that simple.

 

If you are trying to start paying off debt make sure you read The Total Money Makeover and take our Money Spending Assessment below to find out where all of your money is currently going.  It’s free!

The keys to paying off debt are budgeting, decreasing your expenses, increasing your income (you can get creative with ways to do this) and working the debt snowball.  You’ve got this! Commit and start.

 

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