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How to Pay Off Debt When You’re Terrible With Money

My husband and I have “the talk” before almost every check. This will be the check when we finally start figuring out how to pay off debt and get out from under the crushing weight.

But, somewhere along the way, we always seem to dash that thought process and never actually do it.

That’s why I want to document it. I know there are plenty out there that struggle just like us.

Maybe you can relate?

You know you have debt, you know you need to pay it off and you know HOW to pay it off…

You just haven’t quite really decided on making it happen.

Live like no one else now, so you can live like no one else later. –Dave Ramsey

Our Story

We used to be a one-income family until I decided to go back to work.

You know the saying, “the more you make the more you spend.” Well, in our case it was completely and utterly true.

Sadly at least.

When my husband first got his job, we had a 32′ camper we lived in for the first two years he had his job. Slowly we started to get the hankering to upgrade our camper, but under our current situation and income level, we couldn’t.

Then, one day my husband told me he had an opening at work.

Now, just for a little more back information, we met in the military overseas. We were (and still are) both air traffic controllers and the job my husband took was an air traffic job. So, this opening was one I could easily fill even if I hadn’t controlled traffic in 7 years.

So, we talked about it for a few nights and I put my application in – and a few days later I was accepted.

Now we had two incomes.

With this new freedom, we decided we needed a new (used) vehicle. His old jeep couldn’t hold car seats.

Next, we decided to bring our horses 4 hours south to be with us, but we boarded them. Another new expense.

Then, a few months later we upgraded our camper. The biggest new expense of all.

So, rather than just having one truck note to pay off, we now had a truck note, car note, camper note and board for the horses.

But, then with me getting a job, we also needed to put our kids in school.

See how quickly things rack up?

Sure, we make really good money considering we’re lower-paid air traffic controllers. But, we also increased our debt more than we should have.

Talk about not. smart.

How We Got Here

You see, when you’re living in a camper that’s fairly small, you tend to dream of what it would be like to live in a much nicer camper.

Especially when you see them driving through the campground or even staying next to you all the time. You start dreaming hard.

Then, one day you find yourself shaking a salesman’s hand and feeling giddy about your new home that will be dropped off in a day.

And, little by little you incur more debt without even thinking about it. You’re comfortable with your new income level and what it can afford.

But, then something happens…..

All of a sudden you’re not too comfortable anymore.

Now you’re looking for that extra wiggle room because you were keeping up with the Jones’.

So, what do you do now?

Well, you buckle down and try to get out of debt even if you’re horrible with money.

How to Pay Off Debt

Paying off debt starts with a bit of a mindset shift. That’s what we’re learning.

It’s so easy to brush things off and just go out and buy whatever because you think you can.

You have to step back and really examine what you’re doing with your money to understand just how much you’re throwing away without being mindful or even aware.

Don’t believe me? Print out your last three bank statements and highlight all the things that aren’t bills, food, gas, and necessities. Like, actual necessities.

Everything else that isn’t highlighted… yeah, those are the unnecessary purchases you make each month. And, believe me, they hurt.

When we did that we cringed a little (well, I cringed a lot).

But, it doesn’t need to be this way. All you have to do is become aware of your habits and learn how to change them. This is precisely the step we’re at right now.

It all starts in Step 1!

Step 1: Change Your Mindset

Your mindset will be the biggest factor in your debt pay off plan. If you maintain the same mindset you had when you racked up debt, then you won’t be able to get out of debt.

It takes a different mindset to get out of debt. You have to want to get out of debt and be able to have the discipline to not go out and buy things on impulse.

You have to talk with yourself about what’s necessary, what’s a want and what’s something you can definitely live without.

It’s hard work, and it takes effort, but if you can create a debt payoff mindset then you’re ahead of most people that have the desire to pay off debt.

Step 2: Create Your Debt Payment Plan

Getting out of debt isn’t something you do willy-nilly. You need a plan and one that will be easy to follow and show you how you’re doing.

We have chosen to use the Debt Snowball plan.

Debt Snowball is the method Dave Ramsey suggest people use when trying to pay off debt. It puts the debts in order from smallest to largest (no matter the interest rate).

We chose this method over the Debt Avalanche plan because we want to have our small victories vs paying down something that has a large interest rate first.

You have to choose the method that works for you though.

Step 3: Make Your Budget

This is where you’ll lay out all your bills, expenses and things you pay each month.

You want to put down everything you have to pay each month… the non-negotiables.

Then, you might want to consider what you can trim from your monthly expenses – if there are things you can get rid of.

  • Do you need your Netflix account and your cable bill?
  • Do you need other subscription services?
  • Are you subscribed to magazines?

Think about all the things you’re paying for that aren’t related to food, housing, water, clothing, etc. And, if there are things you can get rid of, maybe consider getting rid of some things.

I know for us – or me rather – I’ll be cutting out some things I typically buy on a monthly basis like supplements, products, food items that I enjoy but don’t need. They rack up and I didn’t really realize just how much until I started looking at the expenses.

Write it all down and then also write down your due dates.

Step 4: Follow Your Debt Snowball Plan

This is really important. And, albeit, something I’ve struggled with for a while when wanting to start our debt payoff.

You need to pay your debts first.

This goes against a lot of people who say to “pay yourself first.” But, in reality, if you pay yourself first you might not pay your debts off.

Believe me, that’s what we were doing for the longest. And, I can tell you that it doesn’t quite work. You always find something that needs attention more than your debt.

Or you’ll say, “oh, we can just make a payment next check.” And the cycle goes on and on.

So, pay your debts first and then pay for everything else. This will keep you in check for the rest of your time before the next check comes in.

Step 5: Cut Your Grocery Spending

The average food cost for a family of four with two kids between 2-5 years old is about $196-$244 per week.

Don’t have a family of four? Check out the official USDA food plan document here.

Per. Week. That’s insane.

That means you’ll be spending $748-$976 every four weeks on food.

What’s really sad is that most healthy food items cost way more than their processed counterparts.

But, it is possible to cut your grocery bill to save money. Check out these money-saving worksheets by my friend Victoria.

She helps you really dig down and find out ways to cut your grocery costs.

Step 6: No Unnecessary Purchases

Ugh, this one is the bane of my existence honestly.

Target, Walmart, Sams Club… all of those are black holes when it comes to shopping for food or in general.

They have buyers’ psychology down PAT. But, you have to be strong (silently whispers to self).

If you don’t need it to live, work, or whatever then you don’t really need it.

For instance, do you need 4 different sweaters that look the exact same? (*mostly asks self*)

Do you need that new book when you can read it on your Kindle or even get it from the library?

See, the unnecessary purchases might seem small at the time, but $5-$10 purchases here and there can add up really quickly over the course of 14-days or even the month (depending on how often you’re paid).

And, it can easily be the reason you have more bills left at the end of a paycheck than you do paycheck.

Step 7: Sell Things Around Your House

If you feel like you just can’t pay things off fast enough there is the option of selling things from around your house.

What things do you have at home, but don’t actually use?

You can sell things on Facebook, Craigslist, or even eBay.

Basically, you’re wanting to find things you haven’t used in a long time, that are not family heirlooms, you don’t plan to use, or that’s been locked away and forgotten about.

Downsizing really helps with this. You don’t need to sell your house and go live in a camper… but, even just downsizing things you have will help out so much.

Step 8: Be Committed to Your Budget

This is where you have to get serious. There’s no other way around it.

Either you’re serious about getting out of debt or you’re more committed to spending money.

This is the one thing that really set it in stone for me. I have to be more committed to being free than the ability to buy things now.

Can you commit to the budget you’re planning?

Just because you create a budget this month, doesn’t mean you can’t change it next month. That’s the beauty of this.

You are the creator of the budget and the holder of the budget. If it’s not working then you can find a way to make it work.

Maybe you underbudgeted for gas when in reality you need to increase it more.

You have to start somewhere. So, start with what you think will work and tweak it until you get to your comfort zone of paying things off while not starving yourself either.

Best Apps for Budgeting

Not everyone likes to use pen and paper (or pencil for that matter). So, using an app like one of the three below becomes a very nice alternative.

They all have great features and are well suited for individuals.

But, you have to be the one to figure out which one is best for you. They all act relatively similar, and to me, it personally came down to ease of use and aesthetics (as silly as that sounds).

1. Mint

When it comes to budgeting and tracking your money a lot of people think of Mint. They’re super popular and have a lot of advertisements too.

With Mint, you’re able to connect your bank account, savings, credit cards, and whatever accounts you’d like (provided they are in the system) to track all your bills, expenses, income, and more.

Personally, I’m not a fan of Mint. I can’t give you a reason why though. I just never liked it.

Don’t let my opinion sway you though. There are so many people that absolutely love this app. Give it a shot and see if you love it too.

2. YNAB – You Need A Budget

This is the one that we’re currently dabbling with. And, I will say that it has a steep learning curve.

I haven’t fully set out to learn it (*scribbles on a to-do list) so I need to hurry and get on that.

You can connect your accounts just like Mint.

YNAB is different though because you’ll budget money AS YOU RECEIVE IT rather than budgeting for the projected income for the month.

Here’s a great video explaining it.

Learn more about how to use YNAB for Budgeting here.

3. EveryDollar

So, EveryDollar used to be a bit different than it is now. Transactions used to be something you could do on the free version of it, but you couldn’t import your bank stuff.

Now, transactions aren’t part of the free software and you can only layout your budget. That’s kind of saddening honestly. I loved EveryDollar, and it’s still great, but I love YNAB more.

The aesthetics of EveryDollar is something I loved. It’s really user-friendly and easy to use. It’s only $9.99 monthly so it’s a cheap app and really easy to use once you figure it out.

Give it a shot!

4. BONUS: You Can Budget With Spreadsheets or Printables

If you’re not a fan of any of those, then maybe creating a budgeting spreadsheet or printable would be something you might enjoy.

It’s pretty easy to set up and use for tracking. I created one that’s based around when we get paid each month and I’ll shift our bills around our checks.

Getting paid bi-weekly can be pretty sucky with the paychecks shifting each month and not being the same day of the month.

But, with a spreadsheet or printable, you can easily shift things around. Here’s a post that shares a lot of budgeting templates.

Whether you choose the paper and pencil method, spreadsheets, or one of the apps, it’s the discipline you need to work on when it comes to getting out of debt.

Focus on your mindset, read books to help, and gather a support team too. Surround yourself with people who are on their debt journey too.

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