It’s not rocket science knowing that the key to being debt free is to spend less than you earn. But talking about it is much easier than doing it, which is why so many Americans are strapped with debt.
So how can one successfully pay off debt? With a lot of sweat and tears, apparently. Stories have surfaced on blogs and online news sites sharing how families paid off tens- to hundreds-of-thousands of dollars in debt, and they did it over a three year period (give or take a few months.) It wasn’t a piece of cake, in fact it took a lot of hard work and buckling down to do it. Cutting off the cable, canceling land line phones, no more buying new clothes or going out to dinner – these are all strategies these folks used to meet their goal.
I’m currently working on paying off my consumer credit card debt myself and we’ve used some of these same strategies. However, instead of completely subjecting myself to a life of bare existence, I’ve been able to make a few alterations that shaved off a couple hundred dollars a month in bills:
- Turned off the cable and installed an HD antenna. I’m fortunate to live so close to broadcasting stations, so my reception for local channels is almost better than when I had cable.
- Reduced our insurance. By bumping up our deductibles, we saved a couple hundred dollars a year off our renters and auto insurance.
- Switched our cell phone plan. We canceled Sprint and switched to Ting, which runs off the Sprint network. We saved $100 a month by doing this!
- Canceled one of our land line phones. We had two, now we’re down to one for my husband’s business.
Of course, another strategy for paying off debt sooner than later is to earn more income. This year, we’ve been fortunate that Mr. LH’s business has been busier than ever. With the additional income, we’ve applied it toward paying down our credit cards and boosting our savings. I’ve set quarterly goals, instead of annual, to keep me motivated on the ultimate goal – being consumer debt free. Smaller steps are just more manageable and achievable.
To date, I’ve already achieved my first quarter goals and have nearly completed the goals I’ve set for the second quarter – and that quarter hasn’t even started! I think I need some new goals. 😉
How did I do it? Exactly as I described above: cut back on “extras”, earned more income which I’ve applied toward paying down debt and boosting my savings, and set goals that I can be held accountable for in smaller increments.
Have you paid off a substantial amount of debt? How did you do it?