If your aim is to overcome your debt beginning in 2023, how long will it take? When I was deep in debt I took time to review my debt load, and my expenses and estimated that it would take three years to pay off all my loans.
The challenge with having a three year goal is that we are not great at perceiving time, especially when what we are attempting is difficult. Take dieting for example. Not everyone has been on a diet, but many people have. We’ve all read or heard that dieting doesn’t work. It’s hard for people to commit to eating in a way that will promote a healthy result over a long period of time. I know from my own experience with attempting to eat in a healthful manner. I do well if my day starts with high fiber low sugar foods, however, if I begin my day with something unhealthy, the rest of my day will be unhealthy. Fatigue can cause poor choices, so whenever I’ve had a poor night’s sleep I will reach for a donut before I will reach for an apple.
Plan for success
The same holds for a financial diet. When we get frustrated, when we feel pressure, when we are in a hurry, our choices become poor. You can set yourself up for success if your conduct a pre financial diet plan, and have reasonable outcomes outlined in advance.
What is reasonable for you is personal; however here are a few tips to get you started. These are simple ideas to help you get started with the mindset of frugal living. Once you develop a habit of frugal living most of the tips will become second nature. Modify the tips to work for your circumstances.
- Honestly evaluate where you stand with your debt, income, and expenses.
- Find ways to reduce your expenses for example, stop paying for cable or other forms of expensive entertainment. Read instead, find free streaming services for viewing pleasure. The average American spends a lot on streaming subscriptions, up to $200.00 per month. That’s $2,400.00 per year.
- Stop eating restaurant food, cook at home. Preparing food at home can save thousands of dollars each year. On average Americans spend over $2,300.00 on restaurant food. Imagine using that same $2,300.00 to pay down debt.
- Consolidate all errands to save on the cost of gas.
- Once you have figured out what expenses you can eliminate, take the money you would have spent on those expenses and apply it to ONE credit card. I suggest the credit card with the highest balance and highest interest rate.
- Calculate how long it will take to pay off the one credit card you have determined is the most expensive.
- Pay the minimum payment on every other loan you have, plus a little extra, whatever you can practically afford.
- Once you have paid off the highest card/loan, select the next loan to pay off. Apply all the money you used for your paid off card to pay your next loan, plus the minimum payment and the little extra you were paying.
- Continue to pay off loans in this manner until all your debt is paid off. You should be able to estimate how long this will take once you’ve done the initial work of estimating your debt, expenses, and income.
Once you have your initial time estimate completed you have to begin strategizing how to stay on track. Having a strategy will set you up for success.
Set backs happen
Setbacks happen, understand you will not always meet your mark. Sometimes you will have an unexpected expense. You may need to fix a flat tire, or have an unexpected medical expense. Knowing in advance that you will have setbacks can prepare you to respond with your long term goal in mind.
- Don’t make it a mental catastrophe, you will get through your set back and get back on track.
- Review the success you’ve had so far. I highly recommend using a spreadsheet to track your payment plan. This will inspire you when you see the progress you’ve already made. There are several free budgeting spread sheets available on line, pick one that would work well for you.
- Create a list of positive benefits you expect to see once you have your debt paid off; refer to your list often.
- List two or three big or exciting goals you will accomplish once you are living debt free. It could be going back to school, changing professions, or taking a bucket list trip.
- Plan for setbacks; don’t let unexpected expenses knock you down. If you understand in advance that you will have a setback, you’ll be less likely to beat yourself up and fall back on old habits.
- Look at your plan, is it realistic? It’s good to adjust as needed, perhaps you can afford higher amounts or perhaps you were overly ambitious.
- Remind yourself what your aim is. Don’t get too caught up in having perfect results, but do get caught up in the exiting prospect of debt free living.
- Find a local meet up group that is interested in budgeting or frugal living, they will be a great resource for your journey. You can also join Face Book groups that focus on frugal living.
- Reward yourself with self care versus a new item. A nice warm bath or at home “spa” day with exfoliating, moisturizing or facial can be affordable and a treat. Similarly a great book can be a reward, there at many at your local library.
- Meditate. Get clear about your purpose, goals, and visualize your end result.
- Feed your mind with books, podcasts, YouTube channels, meet ups and Face Book groups that support your interest in debt free living. I find that if I’m consuming information about a topic my interest in the topic grows.
Now that you have a structure in place to understand your debts and expenses, areas where you can save money and which debts you will pay off first, you are off to a good start. You have a plan to get back on track when you have a setback, you have a plan to reward yourself that doesn’t include a shopping spree, you have fuel to feed your interest via social media, or other media or meet ups so you will remain focused. Your tool chest is overflowing and should be a great help in the coming year. Strive for the best possible outcome, while recognizing that you can be flexible as necessary. A manageable process that can be adhered to with consistency will be more effective than an overwhelming process that leaves you feeling discourage, so incorporating change is a good thing when needed.
If you want to learn more about my journey and my ideas about paying off a debt and living a frugal life style you can pre-order my book “Never Worry About Money Again: Gain Financial Freedom by Becoming Better at Managing the Money You Have” due out in print and eBook in February 2023. If you aren’t ready to commit to reading my book keep learning more about my experience, and how you can become a ‘frugalite’. You can subscribe to my newsletter, or check out my podcast Paige Power on Spotify, you can also click the link on my website.
