Being in debt is something we all have a love-hate relationship with. We love the vacations, clothes, cars and stuff it can buy, be we hate to pay the bill at the end of the month.
After finally coming to grips with my dysfunctional relationship with debt, I decided to get out of debt once and for all. Here’s how I paid off $14,000 in just 14 months, and how you can too!
Step #1: Understand Your Money Personality
The first step that I had to take when facing my debt problems, was to understand my personality with money. Was I a spender? A saver? A combination of both or something totally different? Once I understood the way I handled money, it made it easier to overcome those temptations, or even head them off before it became a big deal.
The way we handle and view our finances depends on many different factors: how you grew up, what you learned from your parents and all the good or bad habits you picked up along the way. It’s vital we understand our own personalities and mindsets if we want to manage our money successfully.
If we can embrace both our weaknesses and strengths about ourselves, we can quickly create better financial habits. And that’s the key to accomplishing your financial goals — changing bad habits and reinforcing good ones!
Step #2: Create a Realistic Plan
Once I understood my mindset with money and what my debt pitfalls were, I created a get-out-of-debt game plan. I signed up for ReadyForZero and started plugging in my accounts so I could see an accurate picture of all my debts.
Yes, the amounts were overwhelming and the interest rate on some of the accounts were more than alarming. But then I realized how fed up I was with paying the banks and funding other people’s pockets with my hard-earned cash.
It was time to change!
If it was up to me, I would have been debt free within six months or less, but with an income of 36k per year, that just wasn’t a realistic goal. It’s important to create both an inspiring but realistic plan if you want to be debt-free. Otherwise you might set yourself up for failure and end up going in the wrong direction.
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Step #3: Get Pumped Up
Being in debt has a way of dragging you down, both emotionally and psychologically, so instead of letting it weigh on your mind, day in and day out, it’s better to get pumped up and tackle your debt head-on.
How do you do this?
Well there are many different ways, depending on your likes and dislikes. For me, I liked having a visual aid, something I could look at every day to remember why I was making the financial sacrifices and that it would all be worth it in the end.
Some people call it “Dream Porn,” others call it a “Vision Board,” but whatever your method is just make sure that it gets you pumped up and excited about your debt goals.
If you and your significant other are working towards debt freedom together, turn it into a fun competition. See who can pay off the highest amount of debt each week. Get your whole family involved and make a game out of how much extra money you can find each month. Which brings me to my next point…
Step #4: Use the Power of Peer Pressure
Good peer pressure is a powerful thing, and can be used to your advantage if you learn to properly harness it. To really be successful with your financial goals it’s a good idea to get your friends and family on board with what you’re doing. In the very least, tell them about your goals and plans.
When you share your goals with your friends and loved ones, they can help keep you accountable — and maybe even become your biggest cheerleaders. The truth is no one achieves financial goals entirely on their own, so open up to your peers and allow them to help.
I can attribute a lot of my financial success to the support of the ReadyForZero community along with my amazing community of blog readers. Without the support of your peers, it makes an uphill battle seem nearly impossible. This kind of good peer pressure is what will help you succeed much faster and ensure your goals are accomplished.
You can read more about Carrie‘s journey toward becoming debt free on her blog.
Image credit: iakov