Question from a friend: How do I get out of debt!?!?!!!

The Escape route from debt

Recently, I was with a friend who had an amazing job, but was finding it incredibly hard to get out of debt. We spent the night budgeting and planning an escape route from debt! Below are some tips I gave her.

Situation:
This person has graduated from college/university with a loan of more than $30,000 on all her credit cards, student loans etc. She was finding it hard to get out of debt because once she would pay off the credit card she would use the money again and then she was back to square one. I was like this, and many people are finding it hard to get out of debt.

1) Budget
I used to hate this word with a passion. I used to hate looking at my budget because it would show me exactly what I was doing with my money, which at that time was squandering it away! And this person felt the same way. But budgeting is very key to money success, I seriously know it now. It's called pre-planning.

Anyways, if this person earned 3 dollars she would spend 5 dollars.

When you budget you must make sure that you have spent every dollar on paper before you spend it in real life. The money coming form your next paycheque must be spent on paper before you even receive the money in real life. This will help you stop your over spending habits!

2) List your debts
Make a list of all your debts, from lowest to highest. I learned this from Dave Ramsey and applied this to my life. Why should you list from smallest to largest and not by the amount of interest you need to pay? Because getting into debt is because of habits we have, getting out of debt will also require applying new habits into your life. When you pay off the lowest debt first your it triggers something in your body and give you the boost you need to keep going and going and going!

3) Execute your plan
Wouldn't it suck if you created a business plan and then failed to do it? You would have wasted all your time planning. It's like me writing a blog to help people but never publishing it online or never sharing it with anyone, success is all in the execution.

I hope you enjoy this journey getting out of debt! It's hard and takes perseverance but believe me, it is worth it! I would encourage you to visit daveramsey.com and read on some success stories people had!

Love,
The Money Grrl