• Home
  • Start Here
  • Blog
  • Free Resources
  • Shop My Filofax Store
  • Shop TBM
  • Courses

The Budget Mom

Real Women. Real Life. Real Finance

  • Home
  • Products
    • Live Rich Planner
    • Budget By Paycheck
  • Blog
  • FREE RESOURCES
  • COURSES
  • Shop my Filofax store
  • Shop TBM
MENUMENU
  • BUDGETING
        • Categories

        • Budgeting Basics
        • Budget Guides
        • Budget Tips
        • Budget Recaps & Overviews
        • When creating a budget, most of us focus on tracking our expenses, but tracking your income is just as important. This includes knowing your starting balance.

          What is Your Starting Balance & Why Does It Matter for Your Budget?

          Most of us have invisible money scripts that hold us back from reaching our financial goals. Learn what the three most common money beliefs are and how you can start taking steps to change them. 

          3 Money Beliefs That Might Be Holding You Back

          A wedding is a stressful event for many people because they overextend themselves financially. Learn the six steps you can take to plan a wedding you’ll be proud of on a budget you can afford.

          Wedding Budget 101: Plan for Your Big Day Without Breaking the Bank

  • SAVE MORE
        • Categories

        • Cut Expenses
        • Extra Income
        • Saving Tips
        • If you need to earn fast cash, selling household items online is the easiest way to do it. Here are 20 things in your home that you can sell right now.

          Need Cash Fast? 20 Things In Your Home You Can Sell Right Now

          You don’t need a coupon or a limited time offer to get the best price possible. Thanks to price matching, you can get the best price wherever you shop.

          How Price Matching Can Help You Achieve Your Savings Goals

          The cost of printer ink can add up quickly, especially if you frequently have to print off documents. These eight steps will help you cut down on the cost of printer ink.

          8 Ways to Save Money on Printer Ink

  • FRUGAL LIVING
        • Categories

        • Beauty & Health Tips
        • DIY
        • Family & Money
        • Food & Drink
        • Frugal Living 101
        • Household Tips
        • Holidays & Occasions
        • Kids & Money
        • Forget about a New Year’s Resolution! Try setting a New Year mindset instead. It might not seem like much, but your mindset can make or break your financial goals.

          How to Improve Your Financial Mindset to Achieve Your New Year’s Goals

          It’s not too early to start helping your child build their financial future. If you want to help your child start investing, here are the steps you’ll take to get started.

          How Can My Child Start Investing?

          For many people, the holidays are a stressful and expensive time of year. Learn how to host a holiday dinner without blowing your budget this year.

          7 Steps to Hosting a Holiday Dinner on a Budget

  • DEBT & CREDIT
        • Categories

        • Credit Cards
        • Credit Report & Score
        • Debt Basics
        • Get Out of Debt
        • Loans, Etc.
        • It’s easy to swipe a credit card, but paying it off is an entirely different story. Here’s what you need to know about the true cost of buying on credit.

          Revealed: The Ugly Cost of Buying on Credit

          Should You Buy Your Leased Car?

          Collection accounts can be stressful, but you can bounce back. Learn how to handle collection accounts and improve your financial picture.

          Has Your Debt Been Sent to Collections? Here Are Your Options.

  • FINANCE 101
        • Categories

        • Financial Planning
        • Investing
        • Retirement
        • Tax Tips
        • It’s that time of year again! Unfortunately, we’re not talking about the holidays. Now is the time for everyone to file their taxes. Here is what you need to know.

          2021 Tax Season: How to File for Taxes Online

          It’s not too early to start helping your child build their financial future. If you want to help your child start investing, here are the steps you’ll take to get started.

          How Can My Child Start Investing?

          Just because someone has a large house, luxury vehicle, and brand name clothes, that doesn’t mean that they don’t have money worries.

          What It Means to be “Cash Poor” and How to Avoid It

4 Things You Need to Do Immediately If You Want to Pay off Debt

September 25, 2017
DEBT & CREDIT

Share43
Pin929
Share
Tweet2
Email
974 Shares
  • Bio
  • Facebook
  • Pinterest
  • Latest Posts
Kumiko Ehrmantraut

Kumiko Ehrmantraut

Some links below are from our sponsors. Here's how we make money.
Kumiko Ehrmantraut
Kumiko Ehrmantraut

Kumiko Ehrmantraut

Kumiko Ehrmantraut

Latest posts by Kumiko Ehrmantraut (see all)

  • 2021 Tax Season: How to File for Taxes Online - January 21, 2021

Do you have student loans, credit cards, or car loans that you want to get rid of? This is a great article that sets up an actual foundation for paying off debt quickly.

Do you have debt hanging over your head? Does it feel like a huge weight that you're lugging around that you just can't seem to get rid of?

Student loans, credit cards, car payments, personal loans or any other type of debt can be a significant burden, and cost you tons of money in interest. If your debt burden is keeping you up at night, it's likely causing you more than just sleep. It could also be causing you a lot of extra stress as well.

The key to lessening stress caused by debt is having a plan to pay it off. But before you can come up with a major debt repayment plan, there are some small steps you need to complete first.

Here are four things you need to do immediately if you are serious about tackling your debt.

CONFRONT IT. HOW MUCH DEBT DO YOU HAVE?

Ignoring your debt will never make it go away. When I first started paying down debt, I was terrified to know the truth. I always made the minimum payment and paid less attention to my balance or interest rate. My mindset was focused on making the minimum payment, not tackling the real problem at hand. The truth, I was too scared to add up how much debt I was actually in.

So first thing first, make a list of ALL debt that you have. Credit cards, personal loans, car loans, mortgage, EVERYTHING. Make sure to write down the total balance that you owe.

For now, don't focus on the interest rate or the minimum payment. This first step is meant for you to see the overall picture. It's a way for you to overcome your fear, and accept your situation.

Clarity is critical when you decide to tackle your debt. It allows you to know where you need to go and what you need to do to achieve your goals. It gives you a picture, though not easy to look at, it's a picture of what you need to accomplish to reach your end goal – being debt free.

  • Read: How to Create a Plan to Pay Off Debt

STOP USING YOUR CREDIT CARDS. RIGHT NOW!

Nothing makes the problem worse than adding more debt to an even bigger debt pile. One of the things that made this step really hard for me was giving up the security of having my credit cards in my wallet. I know this may sound strange, but it made me feel better knowing that I had a way to pay for something that I might want, even though my bank account couldn't afford it.

It comes back to the mentality of just “paying for it later.” There is only one solution to this problem, if you don't have the cash to pay for it, don't buy it. Not having my credit cards on me, forced me to just say “no.” I didn't have a choice.

You really have to know yourself to be successful with this step. Some people choose to put their credit cards in a cup of water in the freezer, making them harder to access. Some people cut them up altogether. I know myself, and freezing my credit cards in the freezer wasn't going to cut it. I knew that the moment I wanted a new pair of shoes, a couple of hours of work chipping away at a frozen block of ice was not going to stop me from getting them. So, I made it literally impossible for me to use my credit cards. I cut them all up. Every single one of them.

Whatever you choose to do with your credit cards, make sure you can't use them anymore. I know some friends who actually gave them to a trusted family member to keep while they were paying off debt. It doesn't matter what you do but do something now so you can't access them.

CREATE A BUDGET

If you haven't already, creating a budget is the most important thing you can do if you want to pay off debt. Why is creating a budget so dang important? It will tell you where you want your money to go, and how much extra you can afford to put towards paying off debt.

Knowing how much you owe is crucial, but knowing how much you have is also important. Don't worry about making this step complicated. Don't get caught up in all of the little details. Create a bare-bones budget, and work on the details as you go. Just start.

Start by listing your expenses and your income. Do you have enough income to cover all of your necessary expenses? Do your expenses include your minimum debt payments? Make sure you make enough to cover all necessary expenses and at least the minimum payments on your debts. Any excess income can be used towards your debt payoff goals.

By creating a budget in this step, it will allow you to see if you have extra income to start paying down your debt. It gives you a starting point that you can build on later. It allows you to determine if getting a second job or turning a hobby into some extra cash is worth it. It tells you what you need to and where you need to go.

  • Read: How to Budget When You Are Behind on Bills

YOU NEED AN EMERGENCY FUND

OK, so I know you are probably thinking, “I need to pay off debt, so why is this girl asking me to save money instead?” I was asking the same question when I was told to do this. But in reality, it was probably one of the most important pieces of financial advice that I have ever received.

Tackling the debt you have now is important, but it's also important to not add new debt. If you don't have any money in the bank and an emergency does happen, how are you going to pay for it? You already got rid of your credit cards, right?

For the longest time, I justified my need to take care of an emergency as an excuse to use my credit cards. It was more than an excuse; it was the reality of my life. I had no other option than to use credit to pay for emergency expenses, and for a lot of people, it's the reality of their life too.

You need to create a buffer between you and your debt. Debt should never be your only option to take care of life necessities. I am not asking you to put all of your extra money towards building an emergency fund, all I'm asking is that you start one. I started with only $50 a month, but it was a start.

  • Open an online savings account with CIT Bank

Your end goal with an emergency savings account is $1,000. You can pay off debt and save at the same time. Having clarity and knowing your financial priorities will allow you to do both. Put a small amount of money into a savings account every month, and to make it even easier, I suggest automating you saving contributions.

For example, set up a savings transfer between your checking account and your savings account for $25 to happen every month on the 20th. Now, the date you use and the amount you save might be different, but make sure you set it up through your bank. Automating your savings will make your life so much easier, you won't even have to think about it.

  • Read: Should You Pay off Debt or Save?
  • Read: How to Build an Emergency Fund (Step-by-Step Guide)

If you do these four things, you should start to feel a little bit better about your debt. Once you have completed these four steps, it's time to start thinking about how you want to start paying down your debt.

There are two debt repayment plans I recommend. I give you step-by-step guides on how to use them in the articles below.

Pay off Debt With the Debt Snowball Method

How to Pay Down Debt Using the Avalanche Method

Save

Save

Save

Save

Save

Share43
Pin929
Share
Tweet2
Email
974 Shares

Filed Under: DEBT & CREDIT, Get Out of Debt

Previous article:
« The Ins & Outs of Budgeting – My Expert Interview With Green Dot
Next article:
15 Easy Slow Cooker Soups for Fall »

Comments

  1. DNN says

    October 1, 2017 at 6:10 pm

    I wish I honestly knew how to do this stuff back in the early 2000’s, because as I told another affiliated blogger, I would’ve probably been hitting or been past the $10 million affiliate commission online millionaire mark by now.

  2. Heather @ Happy Humble Home says

    October 5, 2017 at 8:43 am

    What a smart point about how an emergency fund stops future debt! When I was drowning in debt a few years ago, I felt like my savings were working against me. If I used that money to pay off debt I’d save money on interest, right? But having those savings definitely stopped us from adding new debt to our existing debt. The whole debt/savings thing is really a balancing act.
    Great post!

Hello, I'm Kumiko, but everyone just calls me Miko. Welcome to my blog, The Budget Mom. I am an Accredited Financial Counselor® , and mom to a rambunctious boy. Come along with me as I strive to live a life I love on a budget that I can afford. Read more about me.

RECENT YOUTUBE VIDEO

Free Resource Library

Recent Posts

  • 2021 Tax Season: How to File for Taxes Online
  • Need Cash Fast? 20 Things In Your Home You Can Sell Right Now
  • How Price Matching Can Help You Achieve Your Savings Goals
  • How to Improve Your Financial Mindset to Achieve Your New Year’s Goals
  • How Can My Child Start Investing?

Blog Categories

Amazon Associates Disclosure

The Budget Mom, LLC is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

About

  • Home
  • ABOUT TBM
  • Contact
  • Start Here

Important

  • DISCLAIMER
  • PRIVACY POLICY
  • Subscribe

Favorites

  • YouTube
  • Blog
  • Live Rich Planner
  • Budget by Paycheck

Start With My Friday Newsletter

Copyright ©2021, The Budget Mom®
This website contains affiliate links, which means that if you click on a product link, I may receive a commission. This website is a participant in the amazon services llc associates program, an affiliate advertising program where I earn advertising fees by linking to amazon.com.