How To Get Out of Debt
December 31, 2018: organizing my life + finances with the goal of becoming debt free.
Our culture has come to normalize debt as a simple fact of life. We’re pushed and encouraged to take out student loans and credit cards; to get things now and pay for them later. The idea that you would design a sure fire way to pay off your debt is simply not as sexy as the allure that credit card and other lending companies have to offer.
I’m no expert or financial advisor. I have no course or program to push on you. I, like you, was simply desperate to get out of debt and tried everything I could think of to reach my debt free dream.
Whether you’re dealing with hefty credit card debt, interest debt, student loan debt, or are simply trying to save for retirement, I’m here to tell you that building a step by step plan to tackle your debt and become debt free in 2022 is totally possible.
How do I know? Because I did it!
Between student loans, a car loan and medical bills, I had amassed a total debt amount of $50,000.
The first time I started to actually think about money was the summer of 2014. I took myself on a trip to Europe and when I came back, I was broke, unemployed, and clueless as to how to change my financial situation. I took the first job I could find at a law firm that paid $9 an hour— barely enough to pay my bills. I was paying rent for the first time and I was buying Starbucks almost daily.
My brother came over one day and I opened up to him about how I was struggling financially. He asked me, “How often do you buy Starbucks?” I did the immediate defensive thing and said, “Well, I mean, not every day.”
It was during that conversation that he introduced me to Dave Ramsey and his book, Total Money Makeover.
From that point on I was filled with passion to realize the kind of life I could lead if I was out of debt.
I made a budget for the first time, cut all unnecessary expenses, got 3 jobs to make extra money, lived below my means, and started paying back my loans. I was so fired up to get on with my debt repayment journey.
Over the course of the next six years however, that journey took several detours. I stopped making additional payments for months at a time due to all kinds of circumstances that I justified. Life, school and work changes often got in the way of my goals.
For six years, I struggled to stay consistent with paying off my debt. There would be several months or so where I would throw all extra income at my debt in huge chunks and stick tightly to my budget. Then, almost a year would go by where I only made minimum payments and paid no regard to any kind of budget.
Texting my brother during one of the rare seasons where I was intensely pursuing debt freedom.
Then, 2020 and the unthinkable happened. Our world went into lockdown as a result of the COVID-19 pandemic. I, a waitress at the time, was furloughed along with nearly 20 million other fellow Americans.
But through it all, I still had a deep desire to get out of debt, and I always came back to the plan. I made sacrifices and opted out of opportunities that seemed really appealing in the moment, but ultimately would set me back from my goal.
Remembering my dream of being debt free is what kept me going, as slow and steady as it often felt.
And even in the midst of the most dire and unlikely circumstances, on December 27th 2020, I mailed in my final loan repayment check.
I was debt free.
So, if you think it’s not possible to get out of debt in 2022, think again.
Here are 5 simple steps you can take today to start paying off your debt:
Make a budget. Write down every spending category you can think of. There are lots of great apps for this. I recommend Mint, Everydollar, and Personal Capital.
Write out all your debts from smallest to largest, regardless of interest rate. This is called the debt snowball method: you pay off the smallest loan amount first, then you take that monthly payment and apply it toward the next debt with the highest amount. In that way, you tackle your debt in order.
Live below your means. If you have a serious desire to get out of debt, don’t buy Starbucks everyday like I did. Cut out unnecessary expenses. Say “no” a lot. Stick to your budget in this area– you’ll be amazed how much money you actually have when you don’t spend it all.
Get some accountability. If you have a friend, co-worker, or family member who knows what you’re trying to accomplish and has the space to speak honestly into your life, you’ll set yourself up for success to achieve your goal of becoming debt free.
Even if you get sidetracked, discouraged, or downright angry: do not quit. Stay consistent. This was really the key to my debt free success– I didn’t stop chasing after this dream. As bad a job as I did and as much as I could have paid it off much sooner had I not gotten distracted, the truth is I still was able to reach my goal because I simply didn’t quit.
The journey doesn’t have to be perfect; it doesn’t even have to be pretty. You just have to want it badly enough to stay consistent even when it feels so far away. Don’t quit. Though the world will tell you that debt is normal and even desired, remind yourself constantly of your dream to leave 2022 debt free.
If I could do it with six years of failures and during a pandemic where I lost my job, surely you can do it too.
December 27, 2020: the day I mailed off my final loan payment and became debt free.