![]() I still budget and do the things that helped me get out of debt I'm mindful of my spending and align my purchases with my values. My partner and I were able to purchase a home, I switched careers from finance to tech, and, more recently, I started my own company to help other people with their budgets. Paying off my debt not only did wonders for my mental health but allowed me to leave situations that no longer served me and to take risks I wouldn't have otherwise. Since I paid off my debt, my life has shifted significantly from scarcity to abundance. It wasn't always pretty or painless, but eventually I got my budget numbers to a good spot, which ultimately let me pay extra toward my debt. Once I had a budgeting framework to guide me and a strategy for paying off debt, I implemented the plan. The debt avalanche - paying off your debts from highest interest rate to lowest interest rate regardless of balance - is generally a more cost-effective approach to tackling debt. At some point in my payoff journey, I switched from one to the other. What worked best for me was a combination of the "debt snowball" and the "debt avalanche" debt-payoff strategies. The $57,000 in debt I had to tackle seemed daunting, but after seeing it on paper and developing a method to tackle it, it seemed much more manageable than I had initially thought. I figured out a debt-payoff strategy I could stick with I got so good with Excel that I created a whole money command center that made money feel fun. I used Excel to manage my budget and eventually created a spreadsheet system to manage everything from paying off my debt to creating my zero-based budget. Use that list to guide your spending for the month. The idea of a zero-based budget is that every dollar is accounted for. Once you have all your categories written down - make sure to include things like debt payoff or savings - allocate every dollar of your take-home pay to a category until you have no more money left to allocate. Then list the things you typically spend money on in a month, like food, rent, transportation, utilities, and phone plans. ![]() List your monthly take-home pay (after taxes) or your take-home pay for a given pay period. To implement a zero-based budget, all you have to do is grab a sheet of paper. The framework that was the stickiest for me was a zero-based budgeting system, used in tandem with cash envelopes. ![]() There are plenty of budgeting systems out there, and you have to spend a bit of time trying them out before you find the one that works best for you. I found a budgeting system that worked for me I used 3 strategies to pay off $57,000 in debtĪfter a few days of Googling and piecing together a lot of personal-finance research and advice, I crafted a plan to help me get out of debt. When I realized that getting rid of my debt - which was $57,000 when including $48,000 in student loans - would mean less stress and more of an ability to live life to the fullest, my idea of living well shifted. And not only did I get good at ignoring my obligations from time to time, but I became a rock star at spending every last dime of my paycheck like it would be my last, which didn't allow me to plan for a lot of things. I got really good at ignoring the stress of adulting and paying bills. ![]() To me, traveling is the ultimate definition of fun, and I had loads of it - but it always came to a screeching halt as soon as I stepped off the plane and back into reality. The anticipation leading up to a trip and the excitement I felt during the trip or vacation were what I lived for. I was living life to the fullest and living it well. Somehow, in my mind, traveling was a justifiable need - something I had to do to satisfy my soul. That also meant, at times, being willing to be a little late on a bill or two, maxing out a credit card to go on a trip, or even cashing out stocks or borrowing money from retirement accounts. When I was in my mid-20s, living well meant traveling the world at all costs.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |