Are you ready to crush debt this year?
We’re going to give it everything we’ve got and hopefully pay off the last of our non-mortgage debt by the end of this year. It will be quite a feat because by my calculations we’ll be short each month if we just apply our debt snowball payment. We need to find/earn even more money each month to throw at the debt to make our goal by December 31, 2016.
It’s a crazy goal, but I like a challenge and I’m looking forward to our reward when everything is paid off.
Saddled with business and student loans in 2013, I just couldn’t imagine making the monthly payments for the full term of the loans. So I concocted an idea to pay them off early and wrote our Debt Freedom Plan. And with fingers crossed, hard work, and much prayer, 2016 will be the year we taste freedom.
What can you accomplish THIS year? Stretch yourself. We want to crush our debts as quickly as possible, because quite honestly there are better things to do with our money then to send it off to creditors every month.
5 Steps to Crush Debt in 2016
1 – Calculate your debt.
This is such a crucial step. Calculate how much debt you have by using my free Family Balance Sheet. The link will give you all of the information you need to complete the sheet.
2 – Create your own Debt Freedom Plan.
I highly recommend reading Dave Ramsey’s book, The Total Money Makeover. I realized that we were spreading ourselves too thin and our finances were not as great as I thought they were. We are following his debt snowball method and the book provided the blueprint for our Debt Freedom Plan.
3 – Set your guidelines for the year.
What are you willing to give up to reach your goal? I keep telling myself that our sacrifices are short term and once we pay off our debt, we won’t feel the pinch. There are definitely things we’re saying no to, but there are also things that we won’t to give up. What’s important to you? I have no problem shopping at a thrift store and not having cable TV, but I still want to camp and watch my daughters swim meets. Take some time and create your guidelines for the year.
4 – Break your debt crushing goals down into timely steps.
What can you realistically pay off, while still stretching yourself in 2016? My husband and I had 3 large loans to pay off at the beginning of 2015, so we broke it down and planned to pay off 2 in 2015, leaving the last and largest loan to be paid off in 2016. The amount of debt was overwhelming, so I found it easier to break a large goal like, “pay off non-mortgage debt” into smaller chunks.
5 – Prominently post a goal tracker.
It’s important to see how far you’ve come, especially when you’re making really tough spending decisions every day that make you question your WHY. Throughout this process, my husband requested a visual reminder of our progress, especially when we had to say no to some fun stuff.
So I created a goal tracker and I’m giving one to you. It’s in excel so you can modify it to meet your needs. Each block = $1000, and I fit 52 blocks on one page and you can fill it the blocks as you pay down the debt. Make whatever changes you want; it’s yours to use as you see fit. We keep ours on the refrigerator and it is so stinkin’ fun to color in the blocks as we make payments.
Bonus #6 – Celebrate your wins.
Paying off debt is not fun, in fact, it sucks! I can think of many fun things to do with the money instead of sending it to the creditors every month. We built in some celebrations into our Debt Freedom Plan. It gives us something tangible to look forward to when we can say, “WE’RE DEBT FREE!”
A Debt Crushing Year
Let’s join forces this year as we pay off our debt. It is not easy, nor is it normal and it’s nice to have the support of others who are working through similar goals.
People have told us that it isn’t possible to not have a car loan or to not use credit cards. But I disagree. There are people crushing debt every day and I want in on their game! I’m sick of sending our hard earned money to the banks every month. I’d much rather keep it in my own bank account, saving for our future, giving to the causes we hold dear, and living a life free from debt burden.
If you’re crushing debt this year, share your #crushingdebt2016 stories on our Facebook page or Twitter. Join this movement to a better future for yourself and your family.