5 Things to know before beginning a debt journey

Number 3 has a picture of some guinea pigs…

Debt can be scary.  I wasn’t sure I could tame it, much less free myself of it completely.  But the first step to fixing something is admitting there is a problem. I searched around and put together a list of things to know before tackling the debt monster.

Take Action!

Start now!

Enough talk, enough thinking about it, enough worrying over it. Get started now.  For sure, waiting and ignoring will only make things worse. Procrastinating will accomplish nothing.  Pull your credit report, gather your statements, and figure out the real number of your debt. Put your plan together and get going!  

Keep your snow movin’

More to this number game

There are two popular methods for paying down debt known as debt snowball and debt avalanche.  The snowball focuses on paying off the smallest debt amount first, whereas the avalanche starts with the debt with the highest interest rate.  For most people, the snowball is the better method because it gives a win earlier. People stick with something when they are seeing results.

As promised, guinea pig buddies

Debt Buddy

Much like diet and exercise plans, budgets and payment schedules are easier to stick to when you have a person in it with you.  Coming up with strategies, setting goals, celebrating the wins. All these are made better with someone who is going through it, too.

Winning starts with planning

Budgeting

Make a budget. Every. Single. Month. You have to have a plan for your money.  A budget helps you tell your money where to go, not just watch it leave. There are plenty of free tools available to help create a budget specific to your household.  It’s fair to say that not planning how I spent my money caused a lot of my problems. Rest assured there will be things that pop up unexpectedly and make a mess of your budget. Some months are like that, and that’s okay. You’ve just got to adjust for it and keep going.

Debt-free Dog is Happy!

Mindset

All the things you are doing are a means to an end.  Every time you make a budget, cut a coupon, forgo the restaurant for home made, or wait to buy until you can pay cash all help you reach the big goal: financial freedom.  It can be tough to stay motivated, but that’s why you need a buddy to talk to and help celebrate when you make progress. You can do this, and that debt monster won’t stand a chance.

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