I get this question a lot. People know they have a decent income, they know they have debt, but they just can’t figure out how long it’s going to take them to get rid of it all. So naturally….they do absolutely nothing…
Could You Get Out of Debt This Year?
This drives me absolutely nuts!! C-mon, people! You’ve got a debt hanging out there that’s HUGE and is costing you thousands of dollars a year! Stop ignoring it! That ostrich “head-in-the-sand” approach that you’ve grown fond of…it isn’t working! That lion can still see you and you WILL get eaten if you don’t start moving and figuring out this debt thing!
So what’s the answer? What’s going to spring you into action?
1) Know Where You Stand. Total Up Your Debt
Want to know if you can get out of debt this year? First, you’ve got to know where you stand. How much debt do you really have?
Stop reading for a second, go grab a pen and paper, and start writing it all down. Seriously, right now. Don’t convince yourself that you’ll pull this article up later and do it then. It’s not going to happen. Do it now!
- Car debt = ?
- Student loan debt = ?
- Credit card debt = ?
- Medical debt = ?
- Personal loans = ?
- Furniture/appliance/electronics = ?
- Total = ?
So what’s your total? Big or small, it doesn’t matter. What matters here is that you’ve established the finish line – you know the end goal. So congrats! Now we’ve just got to figure out how to get there!
2) How Much Can You Spare Each Month?
In a typical month (you know, those months where you’re not chronically perusing Gucci handbags or dipping your toes in the sand of some Caribbean island), how much excess cash do you have after paying all your bills and feeding yourself? $100? $200?
What if you got really serious about this ‘get-out-of-debt’ thing and started paying attention to your money?
- What if you actually wrote down what you spend each month?
- Maybe you should finally start to question some of those bills that are on auto-pay (cell phone, dollar shave club, subscriptions…)?
- And, what if you actually started to get rid of things you didn’t need and negotiated some bills down that were just getting way too big?
You know what? Instead of $100 extra a month, I bet you could quickly find a way to have an excess amount of $500 or more – all without really breaking a sweat. It just takes a little thing called, “Intentionality”.
Seriously. Try it.
If you’re starting to get the urge to pay off all your debts once and for all…
- First, start by writing them all out, and then
- Figure out where all your other money is going each month.
It’s not hard…it’ll only take you a few minutes. BUT, let me guarantee you, it WILL be an eye opener and it WILL propel you toward financial success.
3) How Much Extra Can You Make?
So after figuring out your spending to see how much you could save, if you really want to make it a goal to get out of debt this year, then you’ll probably want to figure out how much extra money you could make as well!
- Do you have a hobby that could make money?
- Are you skilled in something that people would pay you to do?
- Or, do you have a buddy that’s always looking for extra help in his business?
You’ll want to keep your day job, but that only takes up 8-9 hours of your 24 hour day! What if you worked another 2-3 hours a day at something that earned you $20 an hour? That could earn you an extra $1,600 a month!
I bet that amount of money could help you get out of debt this year!!
Want a list of ideas that will help you make more money? Here’s more than 50 of them!!
4) Putting It All Together – The Free Debt Snowball Calculator
You may not have realized it yet, but you just did all the things necessary to figure out if you could get out of debt this year.
- listed out all your debts
- made a spending tracker (ie. budget! Lol, tricked you into that one!! ;)), and
- figured out how you could make an extra income
And now it’s time for the moment of truth.
It’s time to put all these things together into the free debt snowball calculator (click the link and your download will appear at the lower-left of the screen). Want to know if you can get out of debt this year? This tracker will show you.
[UPDATED in 2020 – This debt snowball link now includes a debt snowball CHART! Check out the image below! When you download the link, the chart is in the 2nd tab of the file. The line is your plan and you can color in your progress as you go!! Enjoy!]
AND, it will also show you:
- when each debt will pay off,
- how much quicker you could pay all your debts off if you could put more at it per month, and
- how big of an impact a one-time payment could make (if you currently have cash stashed away somewhere)
Will you be able to get out of debt this year? Heck, maybe you could get out of debt in less than a year! There’s only one way to find out! Download the free debt snowball calculator, put in your numbers, and see when all those debt will pay off!
Want some more direction on how to use the tool? Check out the original post here.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.