$127,482.30 . . . the number itself stills astounds me. When my husband, who I affectionately refer to as the King of Free in the blogosphere, calculated how long it would take us to pay it off in 2008 the optimistic guess was 7.5 years. The not-so-optimistic guess was 15 years. And yet, just a few short weeks ago, we made our final Sallie Mae Payment YouTube style and then last week declared we were debt free on the Dave Ramsey show.
- Get a Handle on What You Make and What You Spend. Believe it or not, most people don’t know how much they make or spend. And if you want to get out of debt, you need to spend less than you make {like way less}. If it sounds overly simple, it is. To monitor your spending, spend naturally for 30 days, collecting your receipts in an envelope. Don’t spend like a miser attempting to set your budget on unrealistic expectations. AND don’t spend like a “Real Housewife” from any city, just so you can give yourself a ridiculous shoe budget.
- Read Good Books and Talk to Money Smart People. I hate to be rude, but there are a whole lot of people out there who are much, much, much smarter than you. I’m sure your high school teachers thought you had great potential, but if you’re in debt up to your eyeballs, you took a few wrong turns. I cannot overstate the influence The Total Money Makeover by Dave Ramsey had on the quality and direction of our lives. You can check it out at the library so you don’t have to begin your journey in the hole. Or find someone who doesn’t have heaps of debt and manages their money well and ask them what they did. Do NOT ask people who can’t handle their lives or finances for advice. You’ll end up in the same place they are.
- Make Gradual Changes to Scale Back Your Lifestyle. If you go whole hog for anything in this life, you’re going to fall off the wagon and F-A-I-L. Whether it’s a fitness or nutrition plan, how you discipline your kids, or even the way you manage clutter, if you bite off more than you can chew, you’re setting yourself up for failure. There were plenty of lifestyle reductions that we made in Year 4 that we would have scoffed in Month 1 or even Year 1. So it all begins with one small change made for at least 30 days and then another small change added to it after that {rinse, repeat for 46 more months for us at least}. The funny thing is, the more success you have, the more sacrifices you’ll be willing to make.