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Tackling Debt!

If you read my previous blog, you know one of my personal goals for this year is to get out of debt. When I decided to tackle this debt in November, I started out with over $11,000 in credit card debt. What made me decide to tackle this hard? Realizing that I have been "stupid" for far too long, as Dave Ramsey would say. His will be the first in a blog series on books that I recommend.

If you don't know anything about Dave Ramsey, he is America’s trusted voice on money and business. He also has a podcast where he talks with callers from all walks of life about their next money decisions. I absolutely recommend this book for those wanting to get out of debt and move forward financially.

Dave Ramsey walks readers through a series of steps towards financial wealth.

  • Baby Step 1 – $1,000 to start an Emergency Fund

  • Baby Step 2 – Pay off all debt using the Debt Snowball

  • Baby Step 3 – 3 to 6 months of expenses in savings

  • Baby Step 4 – Invest 15% of household income into Roth IRAs and pre-tax retirement

  • Baby Step 5 – College funding for children

  • Baby Step 6 – Pay off home early

  • Baby Step 7 – Build wealth and give!

Did you know that 57% of Americans have less than $1000 in savings? That is staggering! A few years ago, I didn't either. Sad to say, I know of people who work full time but can't afford the $100 deductible to get a broken windshield replaced. How sad! I accomplished step 1 by saving a bit from each paycheck and by taking on some extra side jobs like dogsitting.

Currently I am on step 2! I have listed out my credit card debts from smallest to largest and paying off the smallest first while doing minimums on the rest. Why do it this way? When you pay of the smallest, you feel like you have accomplished something and then you use the money that would've gone to that one toward the next smallest and so on.

So far I have 3 of 6 credit cards paid off! This feels great! Now, I am pushing onward to the last 3 which have higher balances (remember snowball). You might wonder if I have any tips for doing this faster...I do! First: create a budget with Every Dollar app (yes, it's free) to track your income and expenses including debt. Second: you might think me strange or crazy, but essentially I am working 4-5 jobs (including my business). I have a couple part time day jobs plus I also dogsit/housesit and nanny on the side.

There are so many ways to earn additional income that don't require a typical JOB. I love dogsitting/housesitting because it is pretty laid back and allows me to also use that time to do other things (like my photography business)! To some degree, the same came be true about being a nanny. Yes, there are more duties than with dogsitting, but I am writing this blog as the 13 year old that I stay with is downstairs reading.

Have you ever made a plan to tackle debt? Did you succeed? If not, why not?

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