In Debt?

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The following is a guest post.

Most of us have debt, but it doesn’t have to be the norm if you rather pay it off.   You can get professional help with debt or tackle the problem yourself.  With some willpower, a plan, and some automation, you can be debt free.

Track Your Income and Expenses

The first step to any money issue is to figure out where your money is being used.  Track your income and expenses for a month or more to find out exactly where your money is going.  This means keeping up with each and every expenditure.  If you start blowing off the small stuff, you won’t have a perfectly clear picture, so write it all down.  By the end of the month, you will have all of the spending information you’ll need to make a plan.

Make a Plan

You can use what you know from tracking your income and expenses to make debt management plans.  The first step is to see if your income is covering all of your spending.  If it is, then you can use your monthly extra towards debt.  If it isn’t, you’ll need to cut your expenses or increase your income.  Can your housing costs be decreased?  Have you called your monthly services to ask for discounts?  Do you have unnecessary expenses that can be cut?

If you decide to increase your income instead, look into a better paying job or a side hustle.  Dog walking, pet sitting, baby sitting, or a part-time job at a local business can usually fit into any schedule.  Take a look at all of your skills and see what you can monetize.

Tackle the Debt

Once your income surpasses your expenses, you can throw the extra towards your debt principal.  If you make a budget to stick to, remember to include a category just for debt payoff.  You can have it automatically applied or at least automatically moved into a different account to keep yourself from breaking your own rules.  We are sometimes our own worst enemies.

If you follow your own plans and keep hitting your debt with any extra you can scrape together, you will soon be celebrating debt freedom!  Good luck

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1 Response
  1. Camille

    All budgeting newbies (including myself) seem to forget the importance of step #1: tracking all expenditures. My fiance had this general idea of where all his money went when he was trying to figure out what his monthly max car payment could be. Turns out, he completely forgot to factor in food and gasoline expenses into his budget and that put him in the negative.

    I like the 3-step structure you wrote about: Track, Plan, and Tackle… it’s so simple!

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