#1 Step to Becoming Debt-Free

With the New Year around the corner, most of us are thinking about New Year’s Resolutions. Lose weight, eat healthier, exercise, spend more time with family and friends, stop smoking, get more organized, live debt-free. The list of resolutions goes on and on.

I personally believe that one of everyone’s resolutions should be to get out of debt and stop living paycheck to paycheck. To be able to have the cash to do what you want when you want, and stop letting money control you. I want you to control your money – tell it where you want it to go and then physically put it there.

This is not an easy resolution. This is not a quick resolution – not by a long shot. But it is one that every person can do – Every. Single. Person.

As a lot of you know, I’ve suffered from chronic migraines for over five years. (If you missed that post, you can catch up here.) Talk about a HUGE killer of your finances. Missing work for days, and sometimes, weeks at a time makes it incredibly difficult to budget and pay bills, let alone being able to enjoy some fun things in life.

Something that I’ve learned from all of this is that even when things are rough, you can make better choices with your money. Even when things are rough, you can get out of debt and stop living paycheck to paycheck. It’s not easy, but it can be done. Does that mean when times are tough you’ll be able to go out and enjoy a movie or dinner with friends and family? Probably not….yet. But you will get to that point.

A few things my husband and I have learned through this challenging financial time

We can live on a lot less than we thought we could. I’m talking bare necessities some weeks – a few cheap groceries, gas to get to work…yep, some weeks that’s all we could take care of.
We don’t need, and at this point, don’t want the big house. Our house isn’t huge by any means, but quite frankly, it’s far bigger than what’s necessary. At some point, we will be downsizing. That means less to clean, less cost to heat and cool it, more time, and money in our pocket!
God provides absolutely everything we need every single day! Looking back, I can honestly tell you that we’ve had everything we’ve ever needed. We’ve never gone without. He has taken care of us and taught us so much throughout this process (that’s a post for another day!).

We started Financial Peace University by Dave Ramsey about a year ago and it’s one of the best things we could’ve ever done for our family. Are we rolling in a lot of extra dough? Not yet. Do we still struggle some weeks? Yep. But we’re moving forward and taking those baby steps towards becoming completely debt-free.

So how can you become debt-free and stop living paycheck to paycheck? By taking one step at a time.

The very first thing you must do to become debt-free is to get an emergency fund ASAP. Think about the struggles we’ve all had when something unexpected comes up. Are you finding yourself robbing Peter to pay Paul? Choosing to pay for medicine instead of a utility because one of the kids gets sick? It happens. In this life, we ARE going to have problems and emergencies. It’s a fact of life. Instead of stressing over the next possible emergency, wouldn’t it be incredible to have the money set aside to take care of these hurdles?

Just today we had to have some pricey work done on our car. It may sound silly, but I had completely forgotten about this account and asked my husband how he wanted me to pay for it. “Take it out of the ER Fund, that’s what it’s for,” he said! Do you know how freeing that was to walk up and hand the guy $550.00 cash? Yep, it stinks that we even had to use it, but that’s what it’s for. You will have unexpected expenses come up. That’s part of life. Accept that, build up the ER Fund, and feel the relief when you have money set aside for the next challenge that comes along.

Dave Ramsey teaches that you start with $1000. Well, how on earth are you expected to get $1000 when you’re living paycheck to paycheck? There are actually many ways to accomplish this.

The easiest thing to do is to look around the house and see what you’re no longer using – then sell it.
Make a commitment to not go out at all until that $1000 is in the bank. Honestly, once you begin building this up, it’s so easy to make it a priority. Going out and dropping $60 (or more) on a meal just isn’t as important as it once was. Yes, it’s important to set aside time for you and your family, but when you’re building up that ER Fund, you’ll find that it becomes far more important to you than a meal out – knowing that eventually, you’ll get to enjoy those things again.
There are so many side hustles available that really do pay you money. Check out this post from Rosemarie at the Busy Budgeter on side hustles that she recommends.

Make sure you put your $1000 into an account that you’ll be able to get to if needed….and then forget about it. This is not a savings account – this is an emergency fund. There’s a big difference.

I know, I know….I can already hear you say, “But Tam, how can I do that when I’m struggling to get from paycheck to paycheck?” First, let me say, if my husband and I can do it while missing a lot of work, you can too. Start paying attention to everything you’re spending your money on. Lunch and dinner out, that adorable new pocket book you thought you couldn’t live without, that expensive latte that you love so much, that quick stop at the drive-thru for dinner. Make it your #1 commitment and just do it.

In order to become debt-free, you MUST change your behavior. It’s not easy, but it’s the only way to be successful.

This first step in becoming debt-free has made such a huge difference in our lives already, and I want you to experience that same feeling of being in control. It’s truly incredible!

I use to worry about having an emergency because I didn’t know how we would pay for it.

That worry is gone, my friend. Completely gone. The money is in the bank and it’s so incredibly freeing to not worry about it any longer!

Below I’ve included a list of some incredible resources and step by step guides to get you started on your journey of becoming debt-free today.

Financial Peace University – Dave Ramsey

The Busy Budgeter – Rosemarie Groner

The Budget Mama – Jessi Fearon

Lauren Greutman

Make a choice right now to take control of your life. Make a choice right now to start living on cash and stop living paycheck to paycheck. Make a choice right now to change your spending behavior and make a difference in your quality of life.

When we accomplish this, we can meet on our favorite island, sipping cocktails with the Caribbean breezes coming off the ocean, leisurely catching up with what’s been going on in our lives…and the best part – we will have paid cash for it all!

Do you have a great budgeting tip? Comment below and let us know so we can all share in this journey together.

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Until next time, my friend……

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