Learn how one couple creatively used house hacking to pay off their students loans faster!
Paying Off You Debt Faster By Thinking Outside the Box
Welcome back! It's the first week of a new year and I have a question to ask you – how many times have you seen the phrase new year, new you already?
How does that make you feel as you're planning out what you're going to do in 2022?
While I hope you're energized and enthusiastic about your family and financial goals that you want to tackle this year, I can also understand if you're a bit frustrated by all the hype about how important it is to hit the ground running.
Honestly, I kind of feel the same way.
I've been writing about that intersection of personal finance with family and marriage for over a decade.
Every year as we talk about setting and achieving your goals, there are certain patterns that I see happen over and over again.
The biggest one is how few people are actually hitting their goals.
While most people start off optimistic about how things are going to go, many times they burn out before they hit their actual goal.
There are many reasons for that and of course, these last two years have thrown a lot of people for a loop, with COVID in the fallout from that.
However, I think a core reason why people aren't able to tackle their goals is how they approach it.
A few episodes before we wrapped up the year, I was talking about setting up those pieces, building those better habits- making sure that your goals are smart, very specific in that you work backwards to break it down into small steps.
Finding a System That Works for You
Those are key components, but there's another ingredient when it comes to not just making your goals but sticking with it and being consistent. That's finding a sustainable system that makes sense for you and your situation.
I see too many families get very focused on this specific of how. For example, when paying off debt – should we use the debt snowball, avalanche or lasso? The answer is it depends.
It depends how much debt you have.
It depends on how much extra income you have right now to put towards that debt.
It depends on the type of debt you have – high interest or low interest.
All these different factors mean that different families will have different approaches. When I have interviews on hereon the podcast. I want to give you models, not necessarily a map.
The map is what you do. You create this destination that you want to achieve. You can then take the habits or systems or ideas from others and hopefully make it your own. You'll then be more likely to stick and be consistent with the process and see it through two, you hit that goal.
So all this month, we're going to do things a little bit different. Yes, we're going to be talking about families that have hit some great goals together and get into the process of how they did that.
More importantly, though, we're going to be digging into how they were able to find a system that fits them and their season of life.
One of the most important steps is to address and acknowledge where you are now with your financial journey. Then you can see which tools would be best for your situation. So that you can achieve whatever goal you're pursuing.
Another piece of that puzzle. Is to find a process that you enjoy.
If you are trying to tackle a big goal, say you have a mountain of debt to pay off. Or you're trying to get a house down payment put together. Chances are it's not going to happen overnight. So again, that consistency's important. But to stick with it, you have to feel motivated. And one of the best things you can do is find a process that you think is enjoyable.
She and her husband had the big goal of paying off their student loans and cashflowing her degree. It took some creativity as you heard in the teaser because they had to find money in their budget somehow.
They went for a big win and did some house hacking. Not only were they able to save and pay off debt; they had a little bit of an adventure along the way!
In this episode, we're going to get into:
why going for big wins in your budget can be a game changer
some unconventional ways you can slash your housing expenses
skills that you may already have that can save and make you money.
Elle Martinez: You were trying to pay off student loans, which I know is on the minds of a lot of them in the community, but also debt in general. You and your husband, Eric took an unconventional route, especially when it comes to housing.
So before we jump into how you did that, can I ask who started that conversation and who came up with that idea?
Jillian Sirianni: Which one of you is crazier? That's what I want to know. Oh,Elle first of all, I love the theme that you're pulling out. Thinking outside the box, because I think that that is the primary component.
When we're looking at really slashing debt or getting at other financial goals. A lot of times it does take thinking outside the box and moving past some of the limiting beliefs or mindset that we have. Some things are more attainable for some than others so I think there's permission and there's ways for all of us to find ourselves on this journey and what fits for us.
So to answer your question of who's the greatest fear on it? I think for my husband and I, we kind of are neck and neck with that. I don't know that I could fully say who actually ended up making the final call.
But I do remember when we were considering well, before we even considered tiny living, we were looking at boats and motor homes. Not for us.
We were not, we were poor by a lot of standards. We were on vacation. Family and they were talking about, oh, wouldn't it be fun as an extended family to have a used boat that we can share in the summer times together.
So my husband loves to scour Facebook marketplace and Craigslist at the time. Although we don't use that as much anymore, it's gotten a little more sketchy.
In that process, as he was kind of scrolling through, it was looking over his shoulder and seeing these motor homes and realizing whoa, That's everything you need. Why would that need to be just for vacation? What if we were to consider living in it?
So I think it was kind of this, he was looking at it. I was looking over his shoulder and we both add this. What if question? And then that turned into reality. Yeah.
Is Downsizing Your Home Right for You?
Elle Martinez: So can you kind of give me an idea, the general timeframe of having that conversation? Because I think all of us get inspired.
I know for me, I look at the tiny homes and maybe not the super tiny homes, but this idea simplifying and kind of paring down the things we don't need. How did that go from, this is a good idea to let's try this out?
Jillian Sirianni: For us, we move relatively quickly so I would say it was only couple of months before we ended up pulling the trigger on a motor home. Now, granted that was because of life, stage and obligation and responsibility.
We were renting at the time, month to month at this point so we weren't locked into. We don't have kids didn't have kids at the time so we were able to make a shift relatively quickly. It really was just a matter of finding the right deal, finding a good fit for us.
That is the case a lot of times, especially when you're buying used to kind of got to be able to jump on the deal as you find it.
My husband, thankfully, he knows a lot about motorhomes and found a really great one for us and we within a couple of months, bought it pared down, moved in, did that life.
Elle Martinez: That sounds exciting, but I want to take a step back cause I know you definitely saved money. A lot of times when we were doing financial goals and family decisions, there's a little bit of melding and the layers kind of get tangled up.
So were you trying to simplify and saw that this was one way you could do it and save money to use, to pay down the debt? Or were you thinking, we got to pay down the debt. Let's look at these big expenses. What can we change? How did that work out?
Jillian Sirianni: That's a great question. For us, it was definitely looking at the numbers, not only paying down debt, but at the time I was in a place in my career and educational goals where I was seeing an opening to go and earn my master's degree.
When we looked at the numbers and our earnings it just didn't line up, and we said, ‘we've got to find somewhere'. That's one of the things that caused us to look at well, what are our biggest expenses? We lived pretty simply before that. I don't know if I would have described myself as a minimalist at the time, but simply, frugally, absolutely.
In that slow going process of paying down debt on very small incomes. We saw as an opportunity to really cut back on a major expense living expenses due for most people represented usually about 30% of our incomes and so if we could slash that, what an amazing opportunity.
So a lot of people, when they saw us do that, their first question was, well, where are you traveling to? And that wasn't the case. That wasn't the goal.
We did do some traveling, but for us, it was living within our means. We wanted to be able to afford our housing and be able to pay down debt and save and potentially earn my master's degree, which by the way I did do as a result of that motor home.
I know it's such a celebration, but that was the reason and that was the, as you said, Elle thinking outside the box, then that we thought, oh, well, we're already just renting and it's very inexpensive rent, but we found a way to slash that even for.
Look for Big Wins in Your Budget
Elle Martinez: Yeah, absolutely. I love that. You bring up a good point. It's like, what's our circumstances at that time?
Every family is different where they are in their season of life, but I really appreciate that you were willing to look at all of the expenses.
I talk about this on the podcast a lot. I said, yes, you know, it's good to save $5, $10 here and build some good habits, but to have some huge wins, like. Housing, big expense transportation, if they have a car payment and food, like those are the three biggies. If you could get those under control or somehow optimize that, not that you can coast with everything, but it's so much easier.
So kudos on just putting that and keeping that on the table to discuss, even if you didn't decide to go that route.
Jillian Sirianni: Yeah and as you mentioned too Elle fun, like cool, to be able to have this experience and be able to see the actual big win and our finances as a result of this decision, but also learning along the way and things that we're able to implement as a result. We had a lot of other even non-traditional living experiences even from there.
I will say at this point it might come up later, but own and live in a home. It's a small home, but this wasn't for eternity and I think that that's a big misnomer about tiny living that it has to be for forever, or this is a lifetime decision now.
I think even not having a limiting belief in that regard, that I could just do this temporarily to get at a financial goal and then make changes from there based on life situation and my desires that next juncture in the road.
Elle Martinez: Absolutely. You mentioned you had to pair down. Yeah. So first of all, how big are we talking about this, RV, this motor home space was and how much pairing down did you have to?
Jillian Sirianni: So we went from an apartment that was probably about 1200 square feet so not massive, but two bedrooms, big living space, full kitchen, everything you would imagine there to about 800 square feet in that first motor home that we lived in. So relatively big, it had slide outs and. Yeah, it was a good size motor home, I would say, but it was quite the process.
Thankfully, I had moved a lot of times before that, so I became pretty good at understanding what that's going to take, but I, I definitely made throughout our transition time of what am I donating? What am I selling? And what am I taking? And actually there's a fourth category of storage.
We did end up taking out a small part of my parents' attic to put some things that we imagined we might need eventually this may not be an eternal life decision that we live in 800 square feet so let's put some things aside, so we don't have to rebuy them years down the road.
So those four different categories found their homes in four different locations throughout the house. And it really was quite an exercise of identifying and really paying attention to my lifestyle throughout those couple of weeks of what am I using most often? What might be necessary and what's not what is not going to be able to fit? And isn't going to actually have value or benefit to my life in a tinier situation.
Elle Martinez: Yeah. I know sometimes that can be difficult. Like this past year, my mom moved, she's getting closer to retirement. She wants to be with the grand babies so she's rightsizing her house.
She had a nice space, but now she realizes she still wants to have people over. But she had to kind of do that inventory of like the stuff that she had. How often does she use it? Does she want to keep it? Does she want to give it to her friends? Sell it? Like you mentioned, temporarily she stored it just until she knew for sure that this was something she wanted to keep or not. It is the process.
You mentioned your motorhome was used. So be honest with you, was it moving ready or did you guys have to update that or did you do any customizing?
Jillian Sirianni: It was move in ready, quote unquote, but dated. So my husband and I in a previous. I would say life we've been married almost 10 years now, and we've had different side hustles together throughout our marriage. One of which was home renovations.
So we actually had a small business doing renovations for people. It's something we enjoy doing. It's a fun thing for us to do together so we did do quite the overhaul of this motor home. Did our own renovations.
It wasn't necessary, but we wanted to make that little space beautiful and our own so we certainly did our own renovations.
I mean, I'll be Frank about numbers. We were able to purchase it for $18,000 and we put a couple thousand dollars into it and ended up selling it at a profit. We made about $12,000. Yeah. Yup. Great. And that's how we were able to cash flow. My master's degree was through the sale of that motor home then eventually. So it did, it did. I mean, we –
Elle Martinez: get a home for 18,000 now.
Jillian Sirianni: We were able to say we own our home. Just within our means. And at the time, I mean, I'm a social worker, so you can imagine what my salary has been that, but
Elle Martinez: I do love that because it allow you to pursue a career that's meaningful for you, you know? And you do it on your terms.
You lived in another motor home and you tried some other, can you tell me a little bit of those adventures and how that went?
Jillian Sirianni: Sure. I'll take you a little bit on the quick snapshot of the journey. It was the larger motor home and then we moved into and house sat in a log cabin.
So a couple who was nearing retirement, but final years of work and they needed to. I go work in England, but yet they didn't want to sell their home or rented. They just wanted it taken care of. And so us moving into that log cabin allowed us to sell the motor home, but still live rent, free cash master's degree.
Yes. Amazing. From there, we moved in with my grandmother who has dementia and wanting to prolong her ability to be in her own residence for as long as possible. So we then moved in with her. Of course, that was rent-free, but we cared for her. So there was a lot of exchange there yeah. In the caretaking role.
And then from there we bought and lived in a trailer. So the pull behind, not the vehicle version, but a pull-behind trailer. That was the biggest downsize at 170 square feet.
It was so good though. And then sold that and the sale of that was our down payment on our current home.
We are now homeowners and live in St. Petersburg, Florida, but that was the kind of non-traditional living situation that we were in for about four years .
Elle Martinez: Yeah, that's fantastic. If you don't mind me asking, how did you learn about that house sitting? Was that like a friend of a friend or in your network?
Jillian Sirianni: It was within our network. Yes. So it was a friend who knew that we were the type of people who might be open to something like that. Flexible and able to live in someone else's home.
I will say that's not for the faint of heart. And I did learn a lot through that, both in living in the log cabin, as well as with my grandmother, what it is to live in a space where you don't have any of your own things. Right. And I didn't have my own towels. My own dish were my own home goods, but am I able to be content and live in an instant.
Where nothing of it is mine, but I'm able to still make a home there and be content. And my goodness did that teach me so many things that I've now carried over into my own home.
But that, that was through friends or friends however, anyone interested in it absolutely is available to people. There are websites that help connect those who are looking for house sitters with how cities, many people find themselves in those situations where they don't want to rent it.
They don't want to sell their home. They just want it taken care of. So, it's, it's not only for those who have connections.
Elle Martinez: Yeah, but I think it also goes to show that when you take those first steps, your network knows oh, they're willing to try something different.
I think most people their loved ones want to help them out so communicate your goals. Like, Hey, we're trying to tackle debt or, Hey, we're doing this being up you know about your goals.
You never know what opportunities can pop up. Cause I think that's something we overlook or we think loud. I don't want to talk about like, you know, I'm cutting back because I'm, you know, trying to pay off this debt or I'm trying to save up for a house down payment, but if you put it out there, a lot of people will support it.
Jillian Sirianni: It can feel daunting, but I think it's such a good tip Elle to, in anything, right? Whether we're looking for work or we're trying to reach financial goals, or we need a housing situation, I think exploring our own community and telling people that I think sometimes it can feel uncomfortable and maybe even taboo for whatever reason.
But man, do I admire my friends who send me their resumes and say, Hey, I have no expectation here, but if you hear of anything, let me know. So many times it has worked out that, okay. Maybe not in the immediate moment, but now I know so-and-so is looking for something and, and I can help out in that way. So utilizing our own community, I think that's great. Absolutely agree.
Elle Martinez: Yeah, I know for us, it was that stage where we were saving up for a house and we just put it out there. We love to eat that's our socializing, but we needed to save money and it actually was so beneficial. We didn't realize that that time we had friends who were already homeowners and they're like, let's do some potluck.
Let's get out of that rut of going out and meeting somewhere and let's go to each other's places and they realized like, you know, we could save some money. This is always good. Uh, upped our kitchen game with cooking years later. You don't know until you put it out there.
Everyone has a talent and I think most people want to share, you know, if I can help them out, I'll help them out. If there's an opportunity that they think that could, help me, they do that. But if you keep it to yourself, if you're not sharing your, your goals or what you're looking towards, it's hard for people to, you know pitch in.
Jillian Sirianni: It's an untapped form of wealth and capital. If I can even put it that way of when we might find ourselves limited and finances, well, what else do we have available to us?
Who's in our community. How can we utilize friendships with reciprocity? I'm not just saying. Take advantage of, but you might find that others are in a similar place and there's so much that can be gained through relationship and given, and we all desire that that reciprocity and relationship that we don't have to.
I know I described myself as, you know, Poor by some standards, when we moved into our motor home, but also rich and wealthy by others because we did have an amazing community of friends and family. And so I think recognizing that there is more to it than just what's in the bank account.
Elle Martinez: Yes. And I think a lot of people want to share their talents too. Like you mentioned, think outside, that box of only helping financially, maybe there's a talent or something we could swap with each other where it's mutually beneficial.
If someone's listening and they're thinking, you know what, I'm not sure if I want to do the motorhome thing, but I love this idea of trying something different.
Even if it's temporarily, like you mentioned, what are some life lessons or tips you would suggest?
Jillian Sirianni: Absolutely. And again, there's freedom in this not one person's journey needs to be everybody's journey, but I think we don't talk enough about the intersection of our finances with minimalism simple living.
Uh, eco sustainability. And I think that is something that I did learn more about through my non traditional tiny living experiences that I think can be passed on without actually doing something drastic. And so I think even the message of what can we scale back on? Where can we simplify even where in our current lives with how.
Now looks, where can we declutter and free up mental space and energy within our homes? Where can we cut back on some of the mindless spending? I know for me, that prior to moving into tiny living, I love thrift store shopping and yard. I still do like that, but I will say I did it almost as a hobby or weekend activity.
Whereas when I moved into a tiny home, it's like I can't just bring in things, even if it's inexpensive things, I don't have space for it. I think just being more intentional and mindful about what we're spending money on, even if it's inexpensive, even if you have room for it, Do you need it?
Does it serve a purpose? Is it going to help you towards a financial goal? So I think some of these learnings we can implement, even if our current circumstances aren't forcing us to live super small. I also think that just aiming more at that values-based spending, really identifying what's important to us.
Where are our values? How can we make sure that our spending and saving aligns with our values? And where it doesn't the freedom and permission to get rid of that thing. That I don't have to do that even if other people are doing it, people think I should be doing it. I think I should be spending on it.
If I don't actually enjoy it or value. Yeah, there's there's room to adjust our lifestyles. Again, not needing to do something incredibly drastic. And I just think intentional living, we w there are components of what I walked through that I think anybody could implement to varying degrees somewhere along that spectrum.
I think at the end of the day, also looking at what we deem fixed expenses. I think sometimes we just blow past rent, transportation bills, mortgage, you name it because that's fixed. Those are the bills. Now what else? Let me cut coffee. Okay, great. But like you said, L that's not gonna help us long-term cut debt. Really have those big wins that we want to have.
Thinking outside the box, looking at those fixed expenses again, doesn't mean you've got to move into a motor home, but where might there be room? Maybe we're stuck in a mortgage that is super massive. It doesn't align with our values anymore. Kids are out of the house.
I love the term you used for your mom sizing for her current lifestyle. Maybe. Super important. So you don't need a large house anymore and downsizing or whatever capacity that that means. Or maybe you no longer need two vehicles and one vehicle will do it for you. Or maybe we could flip the whole thing all together and you've got room to host people on your property.
You could be the place where other park their motor home or tiny house, or you've got something to rent out on your property and thereby gain community, but also earn more money. So I think, again, we think outside the box on these massive things, and we might find room for ourselves. I think just people often myself included.
We need permission to do that. We need somebody to kind of. AHRQ the fire to think, well, what is available to me with the resources that I currently have?
Elle Martinez: Yeah, absolutely. I love this and I am totally in agreement about value based spending. I know initially it's hard because you do, especially if you've dealing with these bills, you feel like they are all fixed in a way, like you're stuck with us.
But I think like that first step is, can you define the one or two, the few priorities that absolutely. You will never cut from your budget because they bring you that much joy or, you know, you would be miserable without it.
It took us a little bit of time, we did like little money challenges to figure out like, oh, okay. I definitely want to have this in my life or yeah, I really didn't care. But for you, I'm curious, kind of like to wrap things up, like if you had to summarize your must do's or your priorities, that absolutely your budget will support, what would you say those are?
Jillian Sirianni: Yeah. At this point in time and I think that there's room for that to change as life seasons change, but I've narrowed down that I think some of my highest values and priorities are community and our relationships, generosity and beauty.
I think most of what I spend on most, if not all, could be correlated to those top three values and priorities. And so again, what that means for me might shift but at this point it does include food. I am with you on that one.
I that doesn't always need to mean going out to eat, but sometimes it does definitely supplying food to other people. Hosting is the generosity and community piece.
We have a lot of people in our home and staying with us and, and the beauty piece is traveling. Right now for me, I really well COVID really did a number on me with
So thankfully I then moved to a place that I find beautiful and I live near the water. Right now, So means is renovating our home and making it a space that we find beautiful. And so those things I'm okay with spending on and we'll make room to spend on within reason. Of course, we've all got to look at our income and what we can afford and what makes sense for us, but that's where my money is going currently. And I'm thrilled for it.
Elle Martinez: That's exciting. That is fantastic. Now I know. Just scratched the surface because I feel like you have a ton of good stories. So if anyone's listening and they want to, learn more about you and those adventures and lessons learned, how can they do that?
Jillian Sirianni: Oh, you're so kind out Elle I have a podcast with my good friend and cohost Jen, the frugal friends. So you can listen to that anywhere you find podcasts. And also just our website for FrugalFriends podcast.com.
We've got all kinds of fun stuff going on. You can learn about it there and find our episode archive. I know you Al said you might link some episodes specifically about tiny living, but we did do a couple of spots on that.
Elle Martinez: I hope, and I feel like this will inspire families to, find what creative path makes sense for them at this stage of life to tackle those family and financial goals, because it should feel like an adventure.
I don't want anyone listening saying, I have to pay off debt in three years and I'm going to be miserable. No, you can have fun and take care of those financial goals. Thank you so much, Jillian. I'm so glad you came by.
Jillian Sirianni: Thanks Elle for having me. I love the message of freedom you're spreading. Thank you.
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Using the Debt Lasso to Pay Off $50,000 of Credit Card Debt
Carrying a ton of debt can be tough. When it’s credit cards, it’s especially frustrating.
What makes credit card debt so challenging is the high-interest rate. Even if you’re paying each month, it doesn’t seem like it’s making much of an impact.
It can almost feel like being stuck in quicksand. You’re sinking debt into debt and you’re just drained.
Two of the most popular methods for paying off debt are the debt snowball and avalanche, but if you’re dealing with several cards and they all have a high interest rate, then you may want to try the debt lasso.
John and David Auten-Schneider created this method to knock out over $50,000 of credit card debt. They’re also the creators of Debt Free Guys. I spoke with them about the process behind the debt lasso.
Dealing with Credit Card Debt
Elle: David, John, thank you for joining me today. I’m really excited to talk to you guys about a goal that kind of transformed my husband and my trajectory with our families and opening up options, but I’m sure also has done the same for you, which is paying off debt, especially when we’re talking about high-interest debt.
John: Thank you for having us.
Elle: Every year Fidelity releases, their money resolutions [survey] and paying off debt is usually in the top three.
The frustrating part is it seems like you start off good. You’re motivated. And then by the end of the year, you’re like, I really didn’t make any progress.
I think a big part of this is not finding a system that works for you.
John: Absolutely. Absolutely.
David: Yeah. It’s interesting. That was one of the things that John and I at the very beginning, realized that if we didn’t have something that would work for us, it wouldn’t last.
Because we knew it was going to take us several years to pay off our debt, we knew that we needed to figure out something and get into a groove that that would propel us forward and keep us motivated to keep going.
Elle: It’s interesting. You’re saying you knew that it was going to take years. We have a mutual friend, Michelle Jackson, and she recently had put a great post about personal finance unicorns, where not everybody pays off their debt in a year and a half.
They don’t knock out $60,000 in a year. It’s usually a process [such as your own situation].
I wanted to talk to you about that. Why did you create that method and how does that work?
Escaping $50,000+ of Credit Card Debt
John: Yeah, absolutely. So well, so our story is, is that we sort of, at some point just profoundly discovered that we had $51,000 worth of credit card debt.
We got into a panic and a funk and depression, and after we came out of that, we came out of it committed to paying it off.
We started to look at the options that were available at the time to pay that off. We stumbled upon the snowball and the avalanche method and fortunately, my husband’s really good at math.
He crunched the numbers and he’d estimated that it was going to take us like four to six years to pay off our debt with either method and that was just deflating. Like I don’t have that kind of patience.
It just seemed too hard. In our minds, we thought that the faster we could pay off the debt, the more likely we were going to achieve our goal of becoming debt-free.
Our background actually is in finance. So we were helping other people with their money and telling them how to save and invest. We weren’t doing that ourselves, like the cobbler’s kids and their shoes.
David looked at the numbers and we thought, well, what is inhibiting us from being able to pay off our debt faster with either of those methods,
John: besides our bad spending habits. And it was the high-interest rate that was whether it was the snowball or the avalanche method. It was that high-interest rate.
Tackling the High-Interest Rates
At the time we were paying anywhere between 15 and 20%, that was slowing us down. So we asked the question – how can we make that go to zero?
Is there a way to make that completely go away? We started to do some research and we found out that there are actually zero interest balance transfer credit cards.
And we thought, well, is this an option for us to maybe do some consolidation and to pay off our debt faster?
The next problem was those balance transfer fees, so they’re not well, does that make actually make sense?
We actually found out with our particular situation, it did actually make sense to pay those transfer fees, especially if you can find the 12 to 18 month terms that the zero interest rates would last.
We thought, well, geez, we can just eliminate that. And that actually helped us. We had estimated we pay off our credit card debt in three years.
We were really committed and aggressive with it and we ended uppaying it off in two and a half years.
Elle: There’s a couple of things I wanted to talk to you about that because you guys use balance transfer.
Again, high-interest debt. I can totally understand wanting to lower it, but for some people that advocate for the debt snowball or debt avalanche, they kind of want you to completely avoid credit cards.
So how do you resist the temptation of relying or getting back into the credit card habit while you’re moving and you’re opening these accounts?
John: Yeah, of course.
How the Debt Lasso Works
David: So the debt lasso method is more than just a balance transfer or refinancing of your debt. There are actually five pieces to it.
Those five pieces are the things that help you with that whole process.
The very first step is to commit and you have to commit to not adding more balanced to your credit cards.
There’s a number of ways to do that, but that’s the first thing you have to commit to doing. If you don’t commit to doing that, you’ll never pay your debt off.
The second is to commit to a specific amount every single month that you’re going to pay towards your credit cards.
And that amount must be well above your minimum payments. That way you are actually making progress because you’re paying a bigger chunk.
So that’s the first step is making that commitment. The second step is similar to the debt snowball. You want to go out there and you want to look. In this amount that I committed to paying every month, can I knock out a credit card or two in that first month or two?
Do I have a credit card that has a really low balance, a knock those out and that way you get a little boost right at the very beginning?
John Schneider: Step three is the actual debt lasso method where you try to ideally lower your interest rate down to zero, but that option is not available to everyone.
So the lower, you can lower your interest rate the better into as, few locations as possible, which is why we call it the debt lasso.
The fourth step is to automate the entire process. You’re committing to a specific amount that you’re going to pay towards your credit card each month.
You can put that in your bill pay system so it goes out automatically , that eliminates the risk that you won’t make a payment. Or you’ll rationalize away making the amount that you commit to in step one.
Then number five is to monitor. You want to make sure that even though everything’s sort of on automation. You want to just make sure everything’s running smoothly and you’re not missing any payments.
When you do pay off any card, then you rolled that additional payment that was going towards that card to the next card.
And that’s that entire five-step process that helps folks pay off their debt as quickly as possible.
Finding Money in your Budget to Pay Off Your Debt
Elle: Wow. I love how you guys start off with the commitment because it does take a significant change.
Of course, one of the biggest things is the money has to come from somewhere.
Realistically, initially, it’s going to be from your budget. I mean, hopefully you’re earning extra income.
For you, what changes did you have to make with your budget? Where was it coming from with your first part of this debt lasso of those payments? Which one was the hardest and which one was the easiest changes to make?
John: Absolutely. Actually, the very first step that, that we took when we came out of our funk of having so much credit card debt was that David methodically and meticulously went through every expense of ours for the previous 12 months.
He grabbed all our account statements, all our credit cards, checking everything that he could find, any itemize, every expense that we had.
It really blew us away when we did that spending analysis is what we call it. Because had you asked us prior to this analysis, what the quality of our life was? We would have said, you know, it’s okay. But when we looked at our spending, it blew us away. We were living like rockstars on, you know, a bartender budget.
You know, we were just living way beyond our means, but we were traveling well, we were eating and dining. Well, we were drinking well, we had some really nice bottles of wine. It just blew us away.
We realized that if we could reign in our spending is especially in a few particular categories that would help us save a significant amount of money.
So were able to reign in our spending in those particular areas. Probably the number one win that we had – and this is likely the case for most people, most Americans – was that we reigned in our grocery spending in our dining spending dining out spending.
There were some weeks that we were spending $400 a week at the grocery store and $400 dining out. And
David: – for two men –
John: $800. That’s just two men in our thirties. We have never been skinnier. So I’m not sure what we’re doing wrong now, but nobody needs to eat like that.
We were able to lower that and we saved about $30,000 a year by becoming super meticulous with our grocery shopping and reigning in our dining out.
The other thing that we did, and this was the most challenging to answer your question was we were very, very, very social creatures.
We were constantly going out to happy hours and parties and clubbing and to bars and whatnot with our friends who were traveling a lot, most often on credit cards.
So that was the hardest part for us, but we were able to reign that in and we tell people we didn’t stop going out to your point earlier. Cause we. We knew we were social creatures.
We couldn’t just cut cold turkey, but we stopped going out as frequently. And that, that not going out as frequently, also freed up some more money that we could put towards expedite paying off our credit card debt.
So that combination, as well as eliminating our high interest rates really helped fuel paying off our credit card debt. And that’s how we got that paid off in two and a half years.
Paying Off Debt While Still Enjoying Now
Elle: Yeah, that is fantastic. Congratulations because first of all, $50,000 of any kind of debt is a huge one, but credit card debt, which for so many people can sink them to get over.
That is incredible. But I do want to talk about this just a little bit more before we wrap things up. With personal finance, I found for us and for a lot of couples is finding something that’s sustainable. Right?
We’ve talked about this before we hit record of diets and finances going all drastic and yeah.
The big stories are usually these drastic stories that get the headlines. But if you, you want to hit your goals, you have to have something that’s sustainable.
How did you guys strike that balance of paying off debt, which is a good goal to have, but still living and enjoying your life?
David: Yeah. So I think for us one of the biggest, I think issues that folks have today is that people don’t feel like they can have a fabulous life and less they’re in some way, showing everyone else that they’re living a fabulous life.
The easiest way to do that is by your experiences in the past, it used to be things. I think to some degree it is still things, but we’re seeing this shift towards people blowing their budgets and their fi financial future on experiences versus things.
What we realized is that we did have to have something sustainable. One of the things that we came up with is our fabulous life calendar, which is a part of our fabulous life combo you can get it debt free, guys.com.
The idea with that is that we knew that we still wanted to have a great quality of life. Every single month we wanted to be doing fun things and being out with our friends and doing all that.
We knew that if we didn’t fill the calendar up with things that were either free or lower costs that we still really enjoy doing, then we would be susceptible to dropping a hundred, $150 on brunch and day drinking on a Sunday with our friends or having a happy hour that was supposed to be two beers, turned into something that is way longer than a happy hour.
You know, you can do happy hour, then you have appetizers then you have dinner. That kind of thing was what was wrecking us financially. We knew that we needed to fill our calendar up with the great quality of life fund things that we could keep control of the costs of.
And that is what allowed us to feel like we were living fabulous while we’re still paying off our debt and how we have since then had this fabulous, not fabulously broke life because we still focus our a lot of our time and energy on things that are within our budgetary control, which allows us then to focus our money on growth, on investing on enjoying the things that we really want to enjoy instead of things that are kind of disappear quickly after you’ve spent the money.
Elle: I think you’ve hit a lot of good points. It isn’t about deprivation. Yes. You do have to cut out your budget, but you shouldn’t, you should still have joy in your life.
So you mentioned your pay off debt course. Do you mind giving a little more details?
David: So the credit card pay off plan is basically a distillation of what we did over those three roughly three years to learn what we needed to do to get ourselves to where we could pay of debt off and then start paying it off.
So it really comes down to the first set. Is it is all around your mindset. How do I change my mindset to focus on what’s important?
The second, is that the whole idea of how do I reduce my interest and get myself ready to really start paying my debt off?
The third step is how do I create a budget that really works for me? We define our budget as dynamic and focused on happiness. And a lot of people hate the word budget because they don’t focus on what makes them happy when they’re budgeting. They focus on all the other stuff. That piece there, we also kind of loop in this idea of, how can I make more money?
There are some easier ways, not necessarily easy, but there are some easier ways to make a little bit more money to help you pay off your debt faster.
Finally, the thing that most folks don’t have is how do we create a plan with them all of that; that will work for the time period that it will take for me to pay off my debt?
That’s kind of all encapsulated in this course. We have a supplemental piece to that, that our folks who meet with us every Thursday night, we do, I’m sorry, Tuesday nights, we do a group session. They call it financial therapy because we’re constantly talking about wins and challenges and how everyone can contribute to this idea as a group, people are moving through paying their debt off.
But if you want to get an idea of how the debt last one method might work for you and how it might work relative to the snowball, the avalanche method, you can also go to debt-free guys.com or go to debtlasso.com to download a free copy of the debt lasso calculator.
Paying Off $100K of Debt (without Feeling Deprived)
Let’s be clear – getting out from under a ton of debt doesn’t happen overnight. You need a plan and a system to get you free.
One of the challenges families face is when one or both of you are reluctant to get it done because you feel like you’re going to sacrifice having fun for the next few years.
It doesn’t have to be that way.
Toni Husbands, the creator of Debt Free Divas and the author of The Great Debt Dump shares what helped her family pay off $100,000 of debt while still enjoying life in her city of Chicago.
Digging Out from a Mountain of Debt
Elle Martinez: With everything that happened in 2020, and then what this is the first week of 2021 is very eventful as well. The idea of financial security and getting your footing is on the minds of a lot of family.
Specifically one of those goals, as you know, I’m sick and tired of the debt we have and getting rid of them.
I want to jump in with that. Cause you and your husband, Colin paid off a considerable amount of debt. It was over a hundred thousand, right?
Toni Husbands: $107,000 in debt, consumer debt. I was like to remind, so that did not include a house. It took us seven years to do that.
Elle Martinez: Wow. I’m glad you share that information.
Cause I know sometimes I enjoy reading those articles, but you do after a while, get tired of seeing like I’ve paid off a hundred thousand dollars of debt in two years, or these dramatic stories, but many families the story is we came up with a plan and it took some time, but we got there.
First of all, I want to talk to you about how you paid off your debt. You use the debt snowball method, right?
How the Debt Snowball Works
Toni Husbands: I did and that was popularized by a Dave Ramsey, uncle Dave as I like to refer to him.
He’s a little shorter for some people, but I can across his book in 2005 at a conference that I was attending with my mom, he was speaking there at that time.
And his book, the total money makeover. So I read his book and that’s where I became aware of the concept of the debt snowball.
Just to explain it real quick, the debt snowball is basically a process where you list your debts in order of smallest to largest. You focus all of your available cash and pay your minimum on everything, but you focus all of your available cash on the smallest debt on your list.
And the purpose of that is that so that you can achieve quick wins.
Elle Martinez: Gotcha.
Toni Husbands: So you pay that one off and then you go down to the next smallest, once you’re finished with that. Basically the amount of money that you’re using to retire debt grows or snowballs.
As you start to take things off on your list, that snowball grows and you develop momentum and that’s kind of what carries you on through the process.
Why the Debt Snowball Works
Elle Martinez: Okay, so you read this. What about it clicked for you and when you were paying off your debt? Did you make any adjustments to fit your family and your goals?
Toni Husbands: Before I came across Dave Ramsey, we probably were working on this process for some time. I had read other books, are there. There are a lot of different processes, a lot of different approaches.
I known about Suze Orman. I read about the automatic millionaire. Like I was intentional about trying to work on this problem.
At that time, we didn’t even have that much that we, well, I shouldn’t say that much. We had maybe about 40, 45,000 at the time, you know?
When I came across Dave Ramsey, that’s when I had quit my job because we, although we had the debt, we were able to make the payments.
I think that was always our financial philosophy. Can we make the payment? Right?
Elle Martinez: I’ve been there.
Toni Husbands: We can make the payment. We can afford it. Right. Regardless, not looking at the total bill, but before we would, we would try different things.
We were both engineers and so we would create these like really magnificent spreadsheets with all of these colors and bells and whistles.
Then we would like put it on our, putting it in a folder somewhere and not look at it for three months, you know?
Probably two things that happened when I read Dave Ramsey, number one, we had to make a change because a third of our income was mine because I had left my job. We were starting the laundromat. So a third of our income just left and we had to be more intentional and more careful about how we were using our money.
On top of that, I think at this point, just wrote down everything that we had them start to look at it on paper. That was the big thing for me. It’s like looking at it on paper.
I stopped with the spreadsheets. I just would write down everything, put it on my refrigerator and have it there in black and white.
We would look at it every day. We would have discussions about it, we would argue about it, but it was on the top of our mind. It was in the forefront of our mind.
It was something that we paid attention to constantly. I think that’s one of the biggest things that really helped me to stay focused and not just come up with these fancy spreadsheets, Pat ourselves on the back. ‘Yeah, that was good’ and then just not, you know, then kind of go back to our regularly scheduled, you know, and not in that, you know, continue to work on what we needed to work on. That was the big thing for me is like posting it somewhere where it was visible. Daily.
Elle Martinez: Yeah. I love what you bring out because I think that’s not addressed enough, which is how do you find a sustainable plan that already is aligned with really who you are and what you want to accomplish?
Because You could have the perfect template for paying off debt or budgets, but if it’s not you, or it’s not close enough to you, you’re just not going to keep it.
I have that same idea when we talk about like money management apps. People always ask me, well, what’s the best one?
I was like, it’s the one that you can actually keep. There’s so many different options there. I might have a personal favorite, but what works for me, isn’t going to work for someone else in their family. But with that, you have to come up with a plan to tackle it.
Finding Money to Pay Off Your Debt Faster
A big part of that is finding money within your budget. Again, this is something that’s very personal because initially at least it’s going to come out of your budget somehow.
For you guys, Where did that money come from? What was the hardest part that you had to change or adjust and what was the easiest one?
Toni Husbands: That’s a great question. I will tell you that the hardest part wasn’t actually the money part. It was the I would say mentality part because I wanted my husband to make all the changes. So I was like, ‘if you stop doing this and if you stop doing this’, and can make progress, right?
Elle Martinez: Yeah.
Toni Husbands: I didn’t need the cable, you know, you watch them mob package or whatever , so we cut that out. We’ll be good. Right?
That was interesting too, because he was just like, no, and I will tell you too. He was not, he thought Dave Ramsey probably still does is a coop. He was, he was like, he’s just trying to sell books.
He’s very like analytical and critical. That’s the engineering brain so getting him on board was hard, honestly. And it was good. I can say we, we, we debated, we had a lot of intense fellowship, right?
Elle Martinez: That’s a nice way to phrase it.
Toni Husbands: We had a lot of discussions and honestly, I had to stop thinking about what he could do and what I could do in a way that didn’t affect him.
There were things I do in my own hair, right? I started now that’s a big one, especially in the African American community. We spent money on our hair.
I took to YouTube, you know hairstylists since, you know, I figured out how to do a lot of things at home and stretch the amount of time that I would go to a salon, you know, once a month or getting my hair braided all the time. Like figuring out how to do those things myself. Now I might not have looked like I just stepped out of a salon, but I was paying debt off.
Elle Martinez: You got to find that balance. Yeah. I got schooled by friends. I’m like, what? You just go to Supercuts, you get your hair done it cheap, you know? And they’re like, no, not for us. but again, that’s personal because in every situation, first of all, it’s what matters to you, what matters most.
Everybody’s going to be different, but for you to make that sacrifice and find ways to still fit that personal care in with your budget while still dumping the debt is really key.
Slashing Food Bills
Toni Husbands: Another one is cooking. You would think that would be an easy one, but I hate to cook.
I shouldn’t say hate, but I don’t enjoy the cooking experience. How about that? We lived at the time we lived downtown and a very cool little swanky neighborhood, lots of restaurants. And so we was just my husband and I, we would, you know, you can walk outside and go to this restaurant, go to this restaurant.
My husband loves to eat. I’m not that big on cooking. And if I didn’t go, if I didn’t cook, we would just go out or order in or something like that. We had a lot of options.
We were able to save so much money by going to the first of all, switching the grocery store that we went to. We stopped shopping in our little swanky neighborhood.
We found Aldi. That was a huge, at that point I was tracking it at 30% savings by doing nothing else but switching grocery stores.
I’m not a couponer or I don’t clip, but you know, you have to do things that you can do that, you can be consistent about. I got over my grocery store snobbiness.
We thought I’ll be 30% savings and food just right there. Cooking out how long save so much money over, going out to restaurants also better on your waistline to just, you know, just a side note.
Those are things that I had to kind of train myself and it wasn’t, obviously it’s not something that I didn’t get tired or we didn’t go back out, but we budgeted a date night or outside time, you know, smaller things, but not every day of the week.
Six days a week, we were cooking, we were eating inside. My husband doesn’t care where he eats. As long as there was food in the house, he would eat now.
That was a way to make a change without, without forcing something that I wanted on him when he wasn’t ready. I will say it probably took him about a year, about a year to actually kind of come on board.
When he started see like, Oh, we got rid of the first debt was $450 and that win being able to scratch that off was such a boost of momentum.
We were able to pay that one off and then the next one, and I would actually leave them up; checked off X off on my little sheet that I would print out every month.
We can start to see the progress that we were making and that was a source of encouragement and momentum.
Then he starts to kind of come around and like, okay, we can do then he volunteers to make changes on his own.
He’s not being told I’m not his mother. Right. That was kind of the biggest, the hardest thing for me is like, this is a grown man, a fully functional adult, you know, he’s going to make decisions.
Dave Ramsey, he has a saying those convinced against their will or have the same opinion still. Basically you can’t make people do.
As he sees that I’m sticking to this, that we’re making progress, he comes around and so now we’re arguing about what we’re going to cut versus about doing it or not doing it.
Elle Martinez: Improvements you get those steps you moving forward.
Toni Husbands: Right. I was like, ‘yay’ behind his back, but that’s okay. We’ll argue about what you want to cut next. That’s fine. Again, it took about a year to get to that point, but it was like continuous progress on my part in the ways and the things that I could do to show that I was serious about this.
Hitting Your Money Goals (While Still Enjoying Life)
Elle Martinez: Totally makes sense. There’s so many good points I want to get into, but I do want to focus in on your husband, Colin, and you had different approaches.
I think we’ve talked about this before, where he didn’t want to be deprived. That was one of the concerns, going debt free.
So how did you balance hitting that goal, becoming debt-free while still enjoying your life, because you have two kids. That time it doesn’t come back.
Toni Husbands: Right. Yeah. One of the things that we definitely loved to and still love to do is travel.
What we would do is if we just, we wanted to go somewhere or something came up, you know, where there was a trip involved. We would just pause our debt, snowball. Okay. We decided we would pay cash for everything. So we would know we were no longer charging plane tickets and hotels and things like that. We would pay cash for it.
We still traveled throughout this. So that could possibly be why it took so long. So we would pause our debt snowball. We will go on our trip. We would enjoy ourselves. We would come home with no strings attached.
Okay. No bills following us. Then we wouldn’t get back into the debt snowball after. We travel quite a bit, even now with two kids, we still, you know, pre COVID. We still two, three times a year small mini trips.
We take a lot of mini trips, but we have family in different parts of the country.
And then of course I just like to explore periods. So that’s one of the big things that we would definitely do. We started to become tourists in our own city. There are a lot of fabulous things.
We started to like really get into either low cost or free things. You hear a lot of the bad stuff about Chicago, but it’s a very fabulous place to live. It’s there’s a lot to the cities. There’s a lot of great entertainment, you know, like live music and downtown, the taste is free.
There’s a lot of, especially during the summertime, a lot of things that you can do if you research and find things and pay attention. I was intentional about that type of thing too.
We have the festivals, the here, there, everywhere, dancing in the park, the free movies we would do all of that.
Yeah. Honestly, we still do. We still do things that are either very, that you pay for parking pretty much, or you can jump on the lesson, get there. We do that now with our kids .
We really have a pretty full dance card if you will, without spending a lot of money. The libraries have a lot of interesting speakers, the universities have a lot of very interesting things like plays that are, you know, five or $10.
We really had a very enriching experience and didn’t spend a lot of money.
Getting the Most Out of Living in an Expensive City
Elle Martinez: Yeah. I, I love that. We are fans of the library too. I mean, besides picking up books, there’s Storytime, there are crafts.
Now because of COVID, we can’t go inside our community library, but what they did is they did like a Storytime walk around cause it’s by a park, to get the kids engaged.
What I liked about your story is. A lot of people assume like ‘I live in a high cost of living area’, so I can’t do this. We almost put hurdles ahead before you even get started, but it does take effort, not going to lie.
Toni Husbands: Yes. It takes research and, and your taxes are paying for it. So I might as well.
Elle Martinez: You bring up a lot of good points. I know we scratched the surface, Toni. I’m definitely going to have to have you back on again and, you know, chat with you because.
You’ve already like got me thinking about so many different ideas, but for those that are interested in learning more about you, where’s the best way they can reach out?
I’d love to talk with you, connect with you get you involved in the community of like-minded debt dumpers and support your journey!
Key Takeaways on Becoming Debt Free Faster
This month’s money challenge of tracking your finances really lines itself up well, With today’s episode all about paying off your debt.
Seeing the numbers in front of you gives you a clear idea of first of all, how much debt you are looking to pay off and how much room in your budget, you have to hit that goal.
Your next challenge. though maybe deciding which debt payoff method is right for you and your family.
While the debt snowball, avalanche and lasso may have slightly different ways of tackling your debts. There are some key points to them that make them successful tools for many families
The first is that you are making a commitment to get rid of that debt. That might seem like a small step, but it’s absolutely necessary when you’re dealing with a significant amount or with high interest debt.
You have to be sick and tired of having that debt draining your budget month after month.
And be ready to find ways to adjust your budget so that you can have more money to finally knock that debt out.
The second key to why I believe they work so well is that it gives you a focus target. You are tackling these debts one at a time, you pay the minimum on all but one. And then as you’re knocking these out, getting that momentum and having these wins. Then you move it over to the next debt
One point I appreciated with John and David’s conversation. They looked at all the numbers including the timeframe
I’m going to include a link to a free debt payoff spreadsheet that allows you to look at the different methods and find one that fits your own plans.
And as Toni pointed out, when you’re coming up with your debt-free plan, you may have to make some compromises, at least initially so you can get your spouse on board.
She started off with family activities so that she could show her husband that it was possible to pay off debt without sacrificing quality of life.
As they had these wins, he then joined on board and they were able to speed up the process.
Finally, whatever debt free method you decide to go on, make sure that you get it done by automating all of your payments.
You can go ahead and use bill pay to schedule these payments out which can help you stay on track.
If you need help with ways to find money in your budget to get that debt, snowball, lasso, or avalanche started, please sign up for our free course, five days to five K.
It’s a week long email course that shows you some ways that you can readjust your budget. While still enjoying life now. Just head over to simplify and enjoy.com/five K.
Besides the tactics strategies and tips on paying off debt another helpful thing is having the support. So, if you haven’t already please join our free Facebook group; it’s called thriving families.
We enjoy swapping stories, encouragement, and ideas on how to tackle our family and financial goals.
You can get there by going to simplify and enjoy.com/thriving families. We’d love to see you there!
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Home life ceases to be free and beautiful as soon as it is founded on borrowing and debt. — HENRIK IBSEN, A Doll's House
Racking up debt may feel like a cakewalk. You continue borrowing hordes of dollars without batting an eye.
But, once the honeymoon is over and the harsh reality starts to trickle in, you realize the financial blunders you’ve made up until now.
The fact holds true in most of the bad debt cases and that’s why Americans have more than $1 trillion in credit card debt today.
Its touted as the highest amount of indebtedness post the conclusion of the Great Recession of 2007.
Still, all's not lost yet. There are several ways to pay off your outstanding loan balances, regain control over your finances, and save money for retirement.
For that to happen, you’ll have to scale back your overspending spree, stick to a practical budget, and start making smart investments like the Individual Retirement Account (IRA), 401(K), or Health Savings Account (HSA).
If you’re serious about eliminating your debt and want to lead a debt free life, keep reading below.
5 Ways to Slash Your Expenses & Save More
All the expenses, be it big or small, add up.
For instance, unnecessary phone plans or late-payment interest charges are like white elephants for your paycheck. They eat up your dollars.
So, by plugging these loopholes in your monthly expenditure, you can easily eliminate debt and live debt free:
Plan a suitable budget and track your spending
As already mentioned, it is very important to stick to a practical budget if you want to become debt free.
To plan a suitable budget, first jot down your total income and write down your expenses as per categories. Make 2 broad divisions – fixed and variable expenses.
You can’t trim your fixed expenses but you can reduce your variable expenses. Allot a fixed amount against each item. It’ll help you not to spend more.
Then, subtract your expenses from your income and see how much amount you’re able to save. If you want to save more, revisit your budget again.
Make sure you keep a category of how much you’re actually spending on each item; it will help you track your spending.
At the beginning of every month, analyze your previous month’s budget and if required, make changes in your budget.
After a few months, you’ll be able to plan the most suitable and practical budget.
Stop having restaurant meals
If you eat out a couple of times in a week, then those costs would quickly erode your budget and derail your plan to pay off your debts as well as save money.
The solution to such a problem is to carry homemade food to work or college. Doing so regularly will help you to stick to your budget and keep you motivated to pursue making the debt repayments.
In addition, avoid buying bottled water; keep your own water and refill it whenever you get a healthy option, such as an office or a nice restaurant.
Start hosting backyard sale for used items
Another smart way to free up precious cash is to sell your old, used household items by hosting a backyard sale or reaching out to one in your locality.
Just go through your house like an FBI agent investigating a crime scene, and list all the products that you don’t use anymore.
You could thank yourself later, as selling off unused items will make your home clutter-free while providing you with a financial windfall. Contribute those windfalls towards your debt payments and get rid of your outstanding loan balances faster.
Start earning more every month
All your cost cutting tactics become more effective when you get a fat paycheck.
Obviously, you’d have to curtail your expenses if credit card debt elimination and paying off other debts is your primary financial goal.
However, increased income can help you a bit to repay your debts fast.
How can you do that?
You can take up a side gig after your regular work hours or ask for extra projects from your current employer in return for some extra pay.
If you think that your salary is much less as compared to the market and the job you do, you can also negotiate to ask for a raise.
Build a fund to tackle emergency situations
You may think that when you’re trying to repay your credit card and other debts, why will you deposit an amount to build an emergency fund?
But, it’s necessary.
You never know when an emergency situation can push you again into debt. So, you should save for emergencies.
It may not be possible for you to deposit a big amount every month when you’re struggling to repay debt. But, every cent counts. Deposit a small amount to your emergency fund for the time being.
After you become debt free, deposit a significant amount to your emergency fund account. It will help you tackle emergency situations without falling into debt.
It is not easy to eliminate your debts; but, it’s possible. All you need is motivation and little patience. You have to stick to your debt repayment plan till you repay the last cent.
And once you’re debt free, start planning to build a secure financial future.
Author Bio: I'm a freelance journalist living in Oakland. I work for Oak View Law Group, a leading consumer and bankruptcy law firm based in CA and operational across US. I’m a numbers geek who loves helping others to find the right balance between frugal finances and living life fully.