It's time to stop throwing dolla' bills, and start throwing dollas at your bills. You've been carrying around this debt load for far too long, and there's no more room for excuses, especially since that maxed-out credit card means you don't have much freedom to decide where your money is going. It's time to take control.
Below you'll find the best ways to start tackling your debt like a boss so you can manage your money like a serious champion.
1. Ask yourself, "Where do I stand?"
First things first: it's time to review your debts owing. This is going to be the most difficult step because it's basically you, admitting you spent money that you probably shouldn't have (who hasn't?). The bright side is that once you know where you owe, you can start to figure out the best ways to approach your repayment.
Is consolidation an option for you? Are you looking to pay the smallest debts first to get them out of the way? Should you aim for the amount that holds the highest interest? The point is, we all approach money differently. Take a hard look at the numbers and figure out the best course of action.
2. Build a budget.
I know, I know - you saw the word "budget" and you almost clicked away. But hey, budgets don't have to be boring. In fact, your budget can still include room for entertainment, as one of the worst things to do when paying off debt is completely cut yourself off from everything fun. Eliminating all sources of joy is a quick way to make you ditch your budget altogether. You want a balanced budget that allows you to live within your means, while still tackling debt like a boss.
3. Give yourself a buffer.
Something important to consider is preparing yourself for a surprise financial blow-up. If you're going to put money towards debt, chances are you may not have much leftover at the end of each month. Try to allocate money to an emergency fund as a buffer for any unexpected costs that may pop up.
Start small by setting up regular automatic transfers of $50 into a separate savings account. This will give you a great start towards becoming debt-free and living your best financial life.
4. Put yourself on a new kind of diet.
You've heard of paleo, Atkins, The Zone . . . but this diet is less "stopping you from eating doughnuts," and more "stopping you from buying that $100 silk top you'll only wear twice before staining it with red wine." A cash-based diet is a great way to control how much money you're spending each month.
Another idea is to put cash into different envelopes each month that restrict overspending on certain things. For example, if you constantly overstep your grocery budget, putting $100 cash into an envelope will give you a realistic idea of where you stand and how much you have left to spend.
5. Track your spending.
One of the best ways to help yourself become debt-free is to track your spending. Sure, it sounds tedious, but that's only because . . . OK, fine, it is tedious. However, tracking your spending is the first step to stopping yourself from living paycheck to paycheck, which is what nearly half of all Americans do.
If you ever wondered how you got yourself into this sticky situation in the first place, tracking the numbers that go in and out of your bank account will definitely help you understand those bad habits.
Now start your engine.
Now that you've done your research, built a budget, started an emergency fund, and given yourself all of the control by switching from plastic to paper, you're ready. One way to start paying off your debt is to set up an automatic payment ensuring you'll never be late, since late payments only further damage your credit. From there, you can throw as much money as you can afford towards your debt each month.
Debt doesn't have to be as scary as it looks on paper. Those numbers do not define who you are, and they can disappear if you're willing to be patient and put in the work. Remember: patience is the key, and there is no "get rich quick" way to pay off debt. But you'll be surprised how easy it can feel once you start to see the number go down.
After all, when you're competing with yourself, you can't lose.