There are no shortages of Debt Gurus out there and I’ve probably listened to quite a few of them.
There is a world of knowledge out there and no shortage of people wanting to share. The best thing you can do is listen and then decide what you think is worth your while. There is a lot of crap out there too.
For many people who give out advice when it comes to money usually start by saying to make a monthly budget, but don’t delve into it any more than that. They give you the short version of things.
They say decrease your expenses if you can and then do a debt snowball.
Well I think by going quickly over the first step of this change in your lifestyle is a major mistake. And this the where I have a problem, since I think that first step is so very important.
Example: Someone I listened to this weekend said that to decrease expenses for hot water, they take shorter showers without ever mentioning the great benefits of low flow shower-heads (that has saved us huge amounts of cash). There are so many more savings to be had and that extra really starts to count when you calculate how fast you will get out of debt. Squeeze those expenses until you can’t get any more savings is my motto. Don’t skip over any part of a plan, since it’s all part of the big plan and very important.
I think that all you spend should be constantly checked and verified. The savings you will find in decreasing your expenses will play a big role in how fast you advance in your journey, especially in the beginning.
We saved over a $1000 a month by decreasing our expenses. We paid off a credit card twice as fast because of that extra $1000. I paid a minimum on everything else and dumped all the rest on that first debt with higher interest rates, plus that extra $1000.
And snowball it did. Because your credit/revolving/furniture/car bills etc.. are all expenses you spend on every month as well. As you pay those off, your get access to money that wasn’t there before, and it just increases until you are dumping so much money per month on a debt that it becomes a lot easier to get rid of them.
I also count every debt that I got rid of as extra money saved, just like my expenses. Both credit cards were about $100 each every month. My furniture bill was $100 every month. My car was $275 a month. So an extra $575 was added to that $1000 as they got paid off. I love being able to pay less for the stuff I need and then after that altogether get rid of the credit payments.
To see a paycheck go into the bank and be more than what you need, is the greatest feeling ever. But you have to feel you are moving forward and although you can’t suddenly tell your boss you need more money to make a dent in your bills (well, mine won’t help me with that), you can immediately start decreasing your monthly expenses, and that is forward momentum that can happen instantly.
As you all know I still have one big credit line to pay, but the fact that it’s one place and I can give big chunks on it, feels incredible.
Some of the benefits are also knowing that sick days are no longer a big problem. We can take some time off and recuperate without having to worry that something won’t get paid. Just another bonus of having more and more access to funds. By having that $1000 cushion (or some of you call it emergency fund) along with the money we no longer have to dish out on bills, offers a very secure feeling.
In theory, if we got sick. My credit line needs a monthly payment of around $150 if not less. And I have at least $1575 a month that I no longer have to dish out to bills plus the cushion. I can hold back my lump sum payment and heal if I need to, if it ever got real bad.
Our savings are not huge as in money sitting in a bank, but we are doing alright. And with every month that goes by, we breathe just a little better knowing we are liberating ourselves of the weight of debt.
Because it truly is a weight! Don’t ever kid yourself about that.
So don’t skip that first step. It’s a great cheat that you can utilize to encourage you to start your money saving journey!
If you need help you can always looks into my past blogs on this site or even go look at our new YouTube Channel (click on the link below) where I post almost every week about how we save on everyday to help us along!