If you’re like us, you may be one of 44 million Americans plagued by student loan debt. In fact, according to this article, the average graduate from last year owes $37,172. Factor in credit cards, car payments, and many other lines of credit, and you may feel like you’re drowning.
Paying for college is completely on our shoulders. My husbandattended 4 years of undergrad and as well as 2 years of graduate work. I attended and finished cosmetology school and have about 3 years of college studies under my belt. It all adds up very quickly. In fact, our cumulative student loans are almost equal to the mortgage on our last house!
In the early years of our marriage, we also signed up for credit cards to help us along, and continued to use them over the years. We had almost paid off our car when we were in an accident, totaling it. We then had to purchase a new vehicle, setting us back another $20k.
Achieving debt freedom has been a dream of ours for a few years now. And admittedly, we haven’t been as diligent as we could have been. But part of the reason we decided to make the move to Washington was to help us get that much closer to our goal. Debt freedom means having the financial freedom to live life the way you want to, without being tied down to creditors and credit card companies.
The method we use for paying off our debt is similar to Dave Ramsey’s Snowball Method. We budget out our month and apply any leftover money to the item with the lowest amount each month. Then when that item is paid off, we take any additional money each month added to what we had been paying on the previous item, and apply it to the next lowest amount and so on.
If you are interested in learning more about the Snowball Method, you should definitely check out Dave Ramsey’s site. I have not taken the course, however, because I find that paying for a course on how to spend less money and pay off debit is counter-productive, but I know many people do benefit from the full course. I think you can find lots of valuable information throughout the website, though.
Now, maybe you would like to work towards debt freedom, too. Maybe you feel like you don’t have any extra money to put towards debt. Debt freedom is completely possible, no matter how much or how little you owe. It just takes some diligence and discipline on your part. Below are a few ideas to help you get started.
Tips to Get Started Towards Debt Freedom
1. Create a strict budget each month, and stick to it. – Try working your budget each month. This way you can account for any unusual spending you may have. For instance, this month we have a wedding to attend, so we needed to factor in all of the costs associated with travel, gifts, etc.
2. Consider cutting out cable or internet. – We never paid for cable for the two years we lived in the home we owned. We stuck to Netflix for movies and shows and my husband used Sling to stream sports. Honestly, we didn’t even miss it because Netflix has such a wide variety. Hulu is another great option!
3. Minimize your trips to Starbucks or restaurants. – This one is hard for us because when the weekend rolls around, it’s so easy to head to restaurants. Also, I really, really like coffee. But seriously, I like the idea of being debt free even more.
4. Cook and eat at home. – Sit down each week and plan out your meals. Make sure you account for the weekends or whatever days tend to be harder for you. Plan meals in accordance with that weeks activities. If you know your kid has soccer practice Tuesday night and it’s hard to cook, plan a crockpot meal for that day. We love weekends with soups and stews simmering all afternoon. Once you get into the habit of eating all your meals at home, it’s easier to stick with it. And you don’t have to eliminate eating out completely; maybe just limit it to one night a week.
5. Look for free activities in your area. – Take your kids to the park or go for a walk on a nearby trail. Check out your city’s website to see what free activities are coming up. Does a park in your area do outdoor movies during the summer? What about a concert series?
6. Sign up for a cheaper phone plan. – This can be a difficult one for some, but take a look at how much data you actually use each month and adjust your plan accordingly. Same with text messages or other various charges. Maybe there isn’t anywhere in your phone bill where you can cut, and that’s ok, too. Just take a look at the phone bill and see if there is anything you’re paying for that you don’t need.
7. Only drive when you need to, saving on gas. – At my old job, I was lucky that I could go home for lunch every day. But it ate up a ton of gas. If I drove home for lunch each day, I would go through a tank of gas or more each week. But when I was intentional to bring my lunch every day, I could go almost two weeks before needing to fill up. That makes a huge difference!
It works for multiple trips to the store, too. See if you can plan to run all your errands at the same time, rather than multiple trips throughout the week.
8. Consider second-hand purchases. – I am always surprised how much I can save by making second hand purchases. The biggest place I see this is with the kids’ clothes and some baby equipment. If it’s something else, like supplies to make a Halloween costume, or a flower vase, or anything like that, I almost always check out Goodwill first. I save so much money that way!
9. Consider annual memberships over single purchases. – Zoo or museum memberships are expensive, there’s no arguing that. Many times, though, the cost of the membership will pay for itself if you go just two or three times. If you think your family will make visits like these more than twice, consider making the larger purchase of the membership to save money in the long run.
10. Save up for larger purchases. – Do you have your eye on a new sofa? Are you wanting a new vehicle but can get by with what you have? Consider saving to pay for these items with cash, rather than taking out loans or lines of credit.
The choice to become debt free shouldn’t be made without understanding that it does take work, self control, and sacrifice. But if your goal is to truly live in financial freedom, all the sacrifices now will be worth it. We dream of financial freedom and all the opportunities it will allow for us and our kids.