Here I was, hundreds of thousands of dollars in debt all because I took a chance on a real estate business and lost big time.
I felt like a failure, that I would never be able to find my way out.
Do you think you may NEVER be able to pay off your debt? That words like Debt Free will never ring true for you?
You are not alone, my friend!
A series of bad business moves left my husband and I with hundreds of thousands of dollars of debt. For years it paralyzed me. We kept making minimum payments and praying to win the lottery. Then one day I decided to break free; that I couldn’t keep going through life ignoring the massive amount of debt.
We needed to change and we needed a plan.
I got real about our finances and paid off over $109,000 of debt in a year.
These are the 5 steps I took to change my finances forever, and they can work for you, too!
1. I LEARNED WHAT A REAL BUDGET IS
I had been doing it wrong for years. The truth is, what I was doing was just organizing some payments. This was actually hurting, rather than helping, because it kept me stuck in the crazy cycle of living paycheck to paycheck. If you want to read all about how I budget now, check out my post The Worst Budget Ever Revealed.
2. I GOT AGGRESSIVE ABOUT MAKING MORE MONEY
I left a comfortable part-time job that I really enjoyed to take on a full-time job. What made the real difference was that 95% of my new income went directly to paying off debt. Maybe you already have a full-time job and aren’t sure how you can earn additional income. Fear not, we’ve got you covered with 31 Genius Ways To Make Extra Money.
3. I SOLD A BUNCH OF CRAP & OUR DREAM
A few years earlier, we decided to downsize from a 2400-square-foot home to pay off debt quicker, so we bought a 1200-square-foot building on five acres (we got a great deal with creative financing). After two years we had transformed it into a 3-bedroom home, but our first home had been on the market for 1.5 years. It was on a small town busy street and couldn’t sell. We had to make a decision.
We put our just-finished dream home on the market, and sold within days. We didn’t make a profit, but since we had cash-flowed some of the renovations, we were able to access about $25-30k to pay toward debt.
In that process, we also simplified and sold a bunch of items around the house that were no longer needed. I recommend doing this every season. It’s so freeing. You’ll have less crap and more money.
Not sure if you can part with your stuff? Here’s 3 Reasons Why Selling Your Crap Can Transform Your Life.
4. I EDUCATED MYSELF
I started reading book after book , blog after blog on topics like debt repayment, finances, money management and more. I purchased courses and watched tv shows about it. I made time for it. After all of that education, I came up with a system that worked for me. If you want to read more about the exact steps I used to master my finances, check out my FREE mini course Money Mastery Made Simple.
5. I MADE A COMMITMENT TO MYSELF TO ALWAYS KEEP GOING
I learned how to deal with financial setbacks. I dealt with whatever came up, made a plan, and kept going.
It was not always easy, and I made mistakes along the way, but I just rolled with it and kept going. “Progress not perfection” was my motto.
There was a time when I NEVER thought we would actually pay off that debt. If that is how you feel right now, I totally understand and want you to know that you can pay it off and still have a life.
I went on two vacations the year I paid off over $109,000. Each vacation cost only about $1500 for my entire family to go ( I have a gift for organizing cheap, awesome vacations). I did not take that money out of my debt repayment plan so I had to get creative to come up with the extra money.
You can pay off debt and still enjoy life.
Get serious and make that commitment to yourself today.
If you need some inspiration, here’s how you can get in the “Money Zone Mindset.”
If I can do it, anyone can do it. It just takes using these 5 tips with a sprinkle of persistence and creativity!