True story - after ignoring my student loans for years after I graduated in 2015, I got Sallie Mae off my muthf*ckn back in just 7 months!
I found myself out of college, overworked and underpaid, living paycheck to paycheck - just miserable, feeling stuck in life because of my accumulating debt glooming over every life decision.
I was over the bullsh*t. I had goals to reach, places to go, and people to meet. One night in December 2018, I sat my a$$ down and decided to get my money right.
What came out of that night was this incredibly detailed, organized, and automated guided workbook! The Get Your Money Right Digital Workbook gave me the financial clarity I needed to change my relationship with money and create a recession-proof plan to pay my debt off faster.
When I started sharing with friends and family how I was on the road to being debt-free in less than two years, they were feening to understand how.
I’m all about empowerment and sharing the wealth. So, though my debt-free journey was created to get myself to a place of happiness and to live out my fullest potential, I decided to share the process with you, too! Seriously. I’ve laid out each single step I took to debt freedom, just for you!
Here's the full breakdown of the steps it takes to get your money right and start living your best, debt-free life like I am
Figure out your financial goal
I took the time and was honest with myself. I found that wealth, for me, was more dependent on my amount of freedom than my net worth. To have more freedom, I needed to be debt-free and financially stable.
Be clear and honest about what you want. Do you just want to understand your spending habits? Do you want to save more? Do you want to start investing? Do you want to pay off some debt? Do you need more money or just want more money? Take the time to figure it out.
Get an accurate understanding of how much money you bring in every month and how much money goes out every month
I took the time to understand my finances. I wanted to see what I was working with. I laid it all out. I identified exactly, how much money I was bringing in every month and how much of that money was going out every month. What was my monthly net income?
To start this process grab your recent bank statements, bills, and receipts. ALL OF THEM! Categorize all of them and apply your rudimentary math skills. It’s time to start adding and sorting.
You can leave the calculator behind and use my budget sheet to help make this process quick and painless! Use the budget summary and graphs to visually identify where every cent of your income goes and understand your spending habits.
If you get a new job or your paycheck amounts have drastically changed after some time, you can update the sheet or make a whole new one!
Decide what expenses are necessary and what expenses can be adjusted to best reflect your financial goals.
After I got a firm understanding of my finances. I then had to understand and adjust my spending habits. I differentiated want vs. need as they pertained to my financial goals. This is another step where I had to be honest with myself. I looked at where I could cut expenses and where I could put more money… and actually did it!
The biggest tip I can give in your financial journey is to keep your expenses low!
From the budget plan sheet, you can easily identify how much money goes to what expenses. Play around with the numbers (staying honest and realistic about the lifestyle you want/can live) to identify what you can put more or less of your money towards!
Choose a debt-payment method
There are several debt payment methods out there. All of which, can be found with a simple Google search - “debt payment methods.” It’s important to understand that there is no one best approach to tackling debt, only the one that is most comfortable and sustainable for you.
Research the different methods and weigh out the pros and cons.
My debt payment method is very strict and aggressive but yields extremely quick results. My method is a remixed combination of two of the most common payment methods, the avalanche and snowball method. BUT… I did not make minimum payments on all loans. I focused on one loan at a time. (I had several loans under $2K + several over $5K)
HOW I PAID OFF OVER $22K IN STUDENT LOAN DEBT IN 7 MONTHS!
Un-enrolled in automatic payments
Created a monthly budget for loans
Budget amount + extra money goes to a loan with the lowest balance (snowball method)
When I got to loans with balances over $5K, I switched to budget amount + extra money to loan with the highest interest rate (avalanche method)
Financial expert Dave Ramsey says, “You need some quick wins to stay pumped enough to get out of debt completely.” Trust me, with all the quick wins with my loans under $2K, I was looking forward to paying off the ones over $5K.
Set a final deadline to meet your financial goal and break that down into monthly financial goals
I created a two-year debt-free deadline for myself. It was ambitious but realistic, for me. I decided how much money I would dedicate to my debt each month.
Give yourself a deadline for how long you will compromise the way you live now to live the life you want to live later. It’s important to make this a realistic goal so as to not put too much pressure on yourself - which can be extremely detrimental to your health (mental, emotional, and physical). I told myself, “I want to be debt-free in 2 years. Then, I can start funding my entrepreneurial efforts and live a happier life”. (Fair to say, those things came before I even became fully debt-free).
Use my Debt-Free Budget Plan sheet to make this process quick, clear, and painless! Play with the “Start Payment Date” column to figure out what payoff dates look best to you (paying attention to the allotted amount of recurring payments you have set for yourself, with respect to how much money you can realistically live off of and for how long).
Map out how and when you will meet your monthly financial goals
Breakdown each month of your monthly financial goal by paydays. Commit to your plan and track your debt payoff progress.
Use my Debt-Free Budget Plan sheet to easily break down your monthly goals and budgets by paydays. The sheet is fully automated, so you can play around with your income and expenses to see what a structured lifestyle would look like as you work towards your goals.
Use my Debt-Free Tracker sheet to visually keep yourself accountable by keeping track of your payments and making sure they match the plan you have mapped out for yourself.
Once you start tracking your payments and progress (or lack thereof), you might realize your initial goals were unrealistic without some girls’/boys’ nights and birthday dinners involved. That's okay! That's why you're doing this. Either commit to extra working hours or push back your deadline.
Don’t give up
If you get off track, don’t be discouraged. Repeat steps 3 and 5 as many times as it takes for you to find a plan that works for you. As long as you have clarity on your finances, and stay disciplined and committed, you will be living your best, debt-free life before you know it!
TIP: Let your friends know in advance not to be hitting you up for no random nights at the club, expensive dinners, or big trips for a while because you have goals to hit. If they’re your real friends they will understand. Real friends will support you and hold you accountable.
There it is! Now, you know exactly how to get them debt collectors off your line. But before you go, you know all those sheets I mentioned??
GOOD NEWS! They are all part of my fully automated, customizable, and interactive digital finance workbook! Not only can you apply the process I took towards your debt-free journey, but you can use the exact tool I used to become financially free too!
I'd love to hear from you!
How’s your debt-free journey going? What ‘s your reason for finally deciding to take control of your finances? Share you story.
Have a question? Drop your thoughts in the comment section below!