I have officially paid off all my credit card debt and it feels amazing! After months of dedication, sacrifice, and hard work, all the plastic has been cut up, shredded, and eliminated from my life. My consumer debt story started after high school and took me on a foolish journey through college.
In all, I’ve had a total of nine credit cards. Crazy, right? I didn’t get them all at once. I accumulated them through 20% discounts, impatience, and poor stewardship. The oldest cards were the toughest to let go. It felt as if they had become “part of the family”. I am sure many of you can relate. We’ve all had that ONE goto card that provided basic needs or even that “emergency” swipe after realizing you had forgotten your cash or debit card at home.
I decided I wanted freedom from that. I could not settle with the fact that most of my income was going out rather than being invested or being used toward my goals. Owing credit card companies money each month was not a life I wanted to live, so I changed my ways. I became financially smart, changed my money habits, wrote out a plan, and have now paid all of my credit card debt—medical bills included, in just 5 months. I’ve realized being debt-free is a dream most have, but never really believe in. During my journey I’ve heard things like, “We’ll always be in debt”, “Debt is a way of life”, or the sarcastic “I’ll be out of debt when I’m rich”. Having that mindset is a trapped mentality which can be broken with a little guidance and direction.
Below are 6 basic steps I used to pay off my credit card debt that will work for you, too:
Know The Total Balance
The first step to accomplish any goal is to know exactly what you’re going to accomplish. It’s hard to work through a plan if you don’t know the details required to get to the finish line. The first thing I did was contact the credit card companies to find out the credit card balance. This step was easy! You can find out your credit card balance by calling your credit card providers phone number through their website or looking at your credit card statement.
Write It Down!
Once I obtained the balances owed, I wrote them down and kept them in a safe place to reference. This is important as you work through each debt and pay it off. I listed the credit cards in order of least to greatest balance owed. This method worked best for me because I was able to quickly get rid of the smaller balances first which gave me small successes to stay motivated as I worked through the list.
Create a Monthly Budget
I learned that budgeting is important. Without a budget, you do not have a financial plan. And without a plan, you’re planning to fail. Having a budget allows you to know where your money is being spent. It also allows you to take control of your money by consciously knowing what it will be spent on.
Track Your Expenses
Before I started budgeting, I never tracked my expenses or kept track of how much I spent. This caused me to live paycheck to paycheck and overdraft my account many times. After I planned my debt-free strategy, I knew it was important to know where every penny was going. I developed the mindset that an extra penny spent, was money that could have gone toward paying down my debt.
Hustle and Work Hard
I set a time frame for when I wanted to have my credit cards paid off and I knew if I could gain extra income, I would be able to reach my goal sooner than expected. I decided to take my occasional freelancing more seriously and transitioned into business ownership. With the internet readily available and global reach, there are tons of ways make extra income on the side. It just takes a little creativity and willpower. After all basic needs are taken care of, put every extra dollar and cent leftover toward the first credit card debt on your list while paying minimal payments on the others.
Last but definitely not least is priorities. I made sure I knew what my priorities were and how much those priorities meant to me. I made the choice not to spend on unnecessary things and recognized the difference between foolish spending and wise spending. I learned that even a planned purchase that may have been saved for, could still be considered a foolish purchase. Be sure your priorities are in order and that you’re serious about them. Think about what your current and future goals are and if you’ve invested toward those goals or toward unnecessary material purchases instead.
Tell us your story. Are there any financial issues you’re struggling with? Has this article motivated you to begin addressing them? Or do you have any specific questions to help start your journey toward debt freedom? Let us know in the comment section!