BRITHNEY JOSEPH

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How to Payoff Your Debt Faster | Step 5 and 6 : Create a Debt-Free Budget Plan

Taking everything we’ve learned from my How To Payoff Your Debt Faster blog series, we can now create a debt-free budget plan that you can stick to.

Don’t be turned off by the term budget. Trust, this is the ONLY way to pay off your debt and pay it off fast. Not going to lie, for the longest time I thought budgeting was for people with:

  • too much time on their hands

  • boring people without lives

  • house wives

  • extreme couponers

Though, there are people with these lifestyles and activities that participate in budgeting; they are not the only ones. I have come to learn that budgeting is a fancier, shorter term for setting yourself up for success.

Budgeting is for those with:

  • a plan

  • a financial goal

  • an enlightened money mindset

  • the desire to win

  • a need for organization

To create a debt-free budget plan, you’ll want to start by choosing a final debt-free date. That date should be realistic. For me, I told myself I wanted to be completely debt-free in two years (2020). Use my debt payoff calculator to find this date.

My debt-free budget plan was aggressive and ambitious but realistic for me. I decided how much money I would dedicate to my debt each month.

This deadline provided a time frame for how long I would compromise the way I lived now to live the life I wanted to live later. It’s important to make this a realistic goal 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 two 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).

Create your deadline and give a reason for that deadline.

Use my automated Debt-Free Budget Plan sheet to make this process quick, clear and painless! Play with the “Start Payment Date” column to figure out what pay off 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).

Come up with a monthly financial goal for your debts. Create a monthly budget from your net income that you can put towards your liabilities to stick to those monthly goals.

Step 6: Map Out & Detail Your Debt- Free Budget Plan

Breakdown each month of your monthly financial goal by paydays. Commit to your plan and track your debt pay off progress.

Use my Debt-Free Budget Plan sheet to easily breakdown 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 your plan you have mapped out for yourself.

Once you start tracking your payments and progress (or lack there of), 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.


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Step 7: Don’t Give Up >>

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To follow my journey to debt-freedom, live and step-by-step, follow my Instagram, here.

For a consolidated list of the steps I took to pay off over $22K debt in 7 months, check out my blog post - How I Paid Off Over Over $22K in 7 Months While Living Paycheck to Paycheck!