I love the rhythm of the back to school season. It’s the perfect time to get back on track if you’ve let your personal habits slip. After all, the regular sleep schedule alone is beneficial for kids and parents alike. But it’s also a good time to revisit healthy habits like taking care of our bodies by eating well, reading or learning something even if we’re not in the classroom, and of course righting our finances if we’ve gotten off track during the summer months. You can even learn how to pay off debt during this season of life.
Especially if you have any amount of debt, it’s a good time to refocus and begin the process of eliminating it. These tips will take your money back to school, allowing you to achieve greater financial goals.
Have a Little Humility
This is the tip that most people either don’t think about or don’t want to think about. But personal finance is personal. And usually when we’ve accrued debt, we’ve made some major mistakes. If you want to get out of debt, you need to begin with how you think about money and yourself. For some of us, this might include admitting what we’ve done. Even if you’ve amassed debt from something that’s no fault of your own, say a major medical catastrophe that’s left you stretched and overwhelmed, you may need to acknowledge that you don’t know where to begin. We are all humans and we make mistakes. We don’t know everything. Beginning here allows you to begin the process of change.
Get Organized
In 2008 when we began our debt slaying journey, I didn’t even know how much debt we had. We weren’t totally chaotic with our finances. We paid most of our bills on time (or a day or two late). But we were just paying the minimums. I had no idea the sum total of what we owed. After you’ve acknowledged you need to make some changes and perhaps need some help, begin gathering all of the pertinent info necessary to get a clearer picture of your financial situation.
Find a Plan
There are more approaches at paying off debt than most of us ever imagined. In Slaying the Debt Dragon, I shared in detail how we used the debt snowball to successfully pay off $127,428.30. This plan was popularized by Dave Ramsey but the concept has been around for much longer. Basically, you organize your debts from smallest to largest, regardless of interest rate, and then begin attacking the smallest sum. Once that debt is paid off, you “roll” what you were paying toward it into the next larger debt. For us, this method worked. We had actually tried paying off the highest interest rate debt a number of times but kept failing or losing hope.
Cancel Something
In order to pay off debt, you need to do two key things. 1) Reduce your lifestyle. 2) Increase your income. You may not be able to add a second job just yet. But odds are good that you’re currently overspending. We all do it. Whether it’s a Spotify subscription or Disney+, there’s likely something you can cancel. Cable TV used to be first on the chopping block, but now it seems like dumping a subscription is more likely to give you a little breathing room. But here’s the key. Don’t just cancel something and let your spending absorb that amount. Instead, put it toward your smallest debt.
Decrease Temptations and Distractions
All of us also have triggers that tempt us to spend. It could be someone you follow on social media. You don’t have to unfriend them, but use that hide button. Or it may be an email subscription to your favorite store that pings your inbox reminding you of a special sale. It’s time to unsubscribe. In some cases, it can also be a personal relationship that you’ll need to turn the dial down on or have an uncomfortable conversation. Believe it or not, when we began paying off debt and explained to our friends we’d no longer be going out for dinner or spending extra cash, most of them were actually relieved to be off the hook, too.
Stop Borrowing
In 99% of the cases of the people I’ve worked with to help realign their finances, they needed to stop their current financial habits when it comes to credit cards. We stopped using them in 2008 simply because we didn’t trust ourselves any more. Borrowing puts your money into a perpetual cycle that’s difficult to break. And if you use it as a tool to make ends meet, you’ll never make it out. This is so, so difficult in a world that encourages you to take the easy path. And it may take a season of adjustment to pull yourself out of your current pattern. But if you want to be rid of debt, it’s time to quit using credit.
Deep breaths, friends. Just like a nervous first day of school, beginning this path can seem overwhelming and anxiety ridden. I get it. I’ve been there. But it is possible and there’s a way out. Use the rhythm of a new academic year to reset your patterns and begin again. I know you can do it.
My book is now available: Slaying the Debt Dragon: How One Family Conquered Their Money Monster and Found an Inspired Happily Ever After. You can also check out The Debt Free Devotional
This post contains an affiliate link. That means when you get a great deal, learn about a way to save, or maybe even something for free, I may end up making a small commission. All prices are subject to change.
