Hi Everyone :)
After I
announced that I've paid off my debt yesterday, a few people wanted to know how I did it (plus, thanks for all the sweet comments everyone).
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I've had a large & increasing debt since I was 21ish and had recently reached $12,000 and could've kept going... money management
isn't a strength of mine (my parents have often said it burns a whole in my pocket). As a self-employed person supporting myself completely, I was getting sick of wasting my money on credit card minimums that didn't even reduce my totals and feeling the weight of debt on my shoulders.
Here's what worked for me...
1. My first step for me was to
stop spending so the debt quit growing! No more instinct shopping, only planned & needed purchases.
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2. Quit depending on others to bail you out. My parents have such a good heart and helped me pay off credit cards two times so that I could pay them [my parents] back without interest. It seemed like a good plan and they were so generous, but it didn't teach me to quit spending. The 'pressure' of the debt was relieved without feeling the reward of paying it off and the cycle continued (b/c I reused the paid-off credit card in desperate times, it was so dumb). It's kinda like enabling an addiction... doesn't solve the problem.
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2. In January, I got
obsessed with paying off my debt like it was a game... all I wanted to do was see those numbers go down!
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3. Set yourself a
reward. My reward was that once I had no minimums to pay, I could afford to hire an employee and use the budget for credit-card-minimums as her wage... and that free'd me from the overwhelming schedule I was swinging. The reward was so worth it!
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4. Make a
list and prioritize! I wrote down all my debts and the priority of each. I paid of my debt to my Dad first, then the priority of all others was based on highest interest first (
not highest or lowest amounts). Breaking the total down into steps/portions makes it feel so much less daunting and totally attainable :)
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5. Then
work hard. Think of ways to earn extra income, sell stuff you don't need/use and dedicate a few months to lots of work with all extra earnings going
directly to your debt, one at a time in order of priority! All money on top of minimums makes a way bigger impact and your interest payments will go down each month allowing you to add even more to the real debt!
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6. Celebrate each debt/portion paid off with something that costs no money... for me, crossing it off the list and seeing the next statement come in at $0.00 was enough reward but it's different for everybody.
7. Pay all your regular
bills monthly. If you're bad with money, you've probably discovered that utilities and most contracts aside from car and mortgage will let you go a month or two late and charge very little late-interest. I'm ashamed to admit that one of my worst habits was not keeping up with them each month and I was always playing catchup.... which is THE WORST! It's so much harder to make a dent in your debt when all you can focus on is the catch-up game. To keep myself organized and on track, I made myself a monthly chart for the year with all my monthly bills along the left in order of payment required. As I make payment I check it off (check marks are my ultimate reward) & I have REALLY enjoyed being on time every month and organized :)
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8. Once you've paid it off,
close the credit card accounts except for one major credit card and always use cash that you
actually have. Keep your one major credit card and
reduce the credit limit to $1000
or less. After working that hard to pay them off, you're much less likely to want to use it again, but to be safe... make it COMPLETELY un-accessible. Bring your one credit card as extra security when you travel or to order necessary supplies online if you have a small business (paying the amount off
immediately with each purchase). Note: It is bad for your credit score to close multiple credit card accounts all at once. Close them 3-5 months apart, but cut the cards up in the mean time.
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9. Dance!!
10. Save money so you never have to use credit cards again, be ready :)
XOXO, You can totally do this!! Come back and tell us when you get there!
Love Leigh-Ann :)
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Next Post: The big monthly Giveaway :)
I thrifted these delicate crochet coasters last year when Violet was in town and they're still inspiring me :)
I recently made a commitment to myself not go thrifting till September (i usually go weekly). It's a good decision for me because I was collecting too much stuff and realized I need to evaluate what I actually neeeeed. I'm working on a long-term spring cleaning over the next few months so it'll be smart to not bring in more while I'm trying to let go ;)
What kind of Spring Cleaning are you doing?
![[Grrfeisty] main](http://farm3.static.flickr.com/2679/4462337276_57b47b684e_o.jpg)
![[Blue Muse] Giveaway](http://farm5.static.flickr.com/4033/4462337230_9f95095dbd_o.jpg)
![[My Twisted Tree] Giveaway](http://farm3.static.flickr.com/2717/4461562797_92db081bb6_o.jpg)
![[Paper Sparrow] giveaway](http://farm5.static.flickr.com/4022/4462337422_f1fe91e35a_o.jpg)
