True freedom is found in the absence of debt! I don’t know anyone who, when asked if they would like to be debt free, would decline. We all dream of that possibility and it seems so unattainable. Two major problems we come up against when trying to reach financial freedom. #1 life is expensive #2 stuff happens.
But I have good news! It’s not impossible if your really dedicated to the task.
There are several great websites and articles on the best way’s to eliminate debt. Some start with the smallest bill and working your way up, others start with the highest interest bill and then there are those that start with a savings stash before starting to attack your debt. Each way has it’s own positives and negatives, we’ve tried them all.
At one time, a long time ago, my husband and I were debt free. Once you get a taste of such a freedom it is depressing to find yourself back in debt. We thought we were pretty set up, no debts and a hearty savings account. If we did finance something, we were careful about the payments, interest rate etc. But like many people we were not nearly as prepared as we thought we were when life got hard. Through a series of unfortunate events covering everything from sickness, unexpected bills and a property dispute we found ourselves swimming in debt within a very short period of time. By December of 2010 we were in more debt then we had ever been in and every day was a struggle. Would we have enough to eat this week? Could we scrape together enough for gas to get to work? Could we pay our bills? Although we tried our very best to be responsible bill payers sometimes there just wasn’t any money in the bank so bills were paid late or split into two, that hurt our credit. It was a terrible time! We knew we needed to get rid of these debts but how in the world do you pay off bills when you can hardly pay the minimum??
December of 2010 was a turning point for us. We stopped trying to consolidate our debts which, for us, only made things worse and starting putting to paper a plan of attack. First up? A debt pay off list. We needed to see what debts we had, how much we owed on each, how much interest each had and how much we were paying per month on each bill. Then we needed a budget to keep tract of our monthly expenses, we needed to aggressively eliminate any debt we could live without even temporarily and last, we needed to open our minds to other sources of income.
We will take a deeper look into each of these debt elimination steps and how to apply them in future articles.
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