As you may have saw recently on Instagram, I went back and did another segment with my girl, Rachael Ray, about how to get out of debt (…in 3 simple steps, even)! It was so fun (if you can't tell, I absolutely LOVE going on that show!). Unfortunately I didn't know when the segment was going to air, and wouldn't you know…it aired while we were in Thailand and I completely missed it. #Doh! Luckily they strung together some clips from the segment posted online for those of us who missed it! (See below.)
The reality, though, is that there was a LOT covered in that short 8-minute segment! To help you sort through all the information, I have broken down the 3 steps covered in the segment, and have offered LOADS of additional details below!
But first…how we got out of $15,000 of debt…in one year, on a $31,000 salary:
As many of you know, Bubba and I got ourselves into significant credit card debt when we were newlyweds, working to build a business. In a short amount of time we found ourselves with $10,000 on just one credit card (about $15,000 in total outstanding debt), an SUV we couldn't afford, $0 in our bank accounts (thanks to a real estate investment gone wrong), and little to no income. It was…terrifying, to say the least.
In researching, I read all about how to pay cash for a house or car, or what 401K's to invest in. I also found loads of sites showing how to find good deals and coupons to clip. But I found no one online who spoke “Jordan”. No one to help me manage the day-to-day, real life finances. How to clothe my kids, make my house a home, and date my husband without breaking the bank.
When it came to realistically managing day-to-day, real-life “lifestyle” finances and budgets, I forged the way on my own…
…and it worked.
Instead of focusing on the $500, $1,000+ dollars that we didn't have as much control over, I created systems for organizing my day-to-day dollars.
I quickly learned that the way to get out of debt, even on a tiny income, didn't come down to the big numbers. Rather, it's the $1, $5, $10 daily decisions that made all the difference.
Today I'll share 3 of the biggest principles I created that not only helped get our family out of debt, but through this blog and my budgeting program (Budget Boot Camp – use the code FCFBLOG to get 10% off!) have helped hundreds of thousands of families tackle their debt and get their finances in order.
And wouldn't you know, it's simpler than you think!
First, here are the compiled clips from my debt segment on Rachael Ray. Watch it online or click and watch below:
Now, let's tackle this debt!
This time of year, debt tends to be at it's all-time high, as we work to recover from the intense holiday spending. To help soften the blow next year, might I first recommend my “How much to spend on Christmas” 3-part series to help you get a decent grasp on your holiday budget.
But now, onto the 3 tips that will help you get out of debt in record time:
1 – How to do a Spending Freeze:
A spending freeze is exactly what it sounds like…you freeze your money, and withhold from spending any money for a specific period of time. Then, the money that you would have typically spent during the freeze, you put toward debt, or a specific savings or financial goal. I’ve heard of people doing spending freezes for an entire month or more. And for anyone who has successfully accomplished this, hats off to you. I personally recommend doing spending freezes for just 1 week at a time to start. 7 consecutive days, that’s all! It’s a short enough amount of time that you can do it with little to no preparation, but it’s long enough that you will save a substantial amount of money in that time.
2 – The 7 (at least) bank accounts every family should have:
This is one of the most viral posts I've ever had...and for good reason. It sounds CRAZY, right?? Most of us have two accounts – one saving, one checking. Have you ever considered opening MORE accounts to help you organize your money better? If not, then you should! For my husband and I this is one of the single easiest things we did to get us out of our scary financial situation…and fast. And no, you don't have to have lots of money to do it. In fact, we were living paycheck-to-paycheck at the time that this started working the best for us.
For all the details, see a breakdown of the 7 bank accounts HERE.
Here's an additional Q&A video we did on the 7 accounts as well:
3 – The Simplest budgeting technique EVER:
Budgeting can be complicated. Frustrating. Hard, even. When my husband I went through our tough financial time we learned one glaring fact about budgeting…
In this post I will break down my ridiculously simple, easy, and practical personal budget system that single-handedly got us out of major debt (including $10K on just ONE credit card!) and helped us get ahead financially. The best part? It's worked for thousands of people too! The technique works whether you use cash, debit cards, or credit cards to do your spending.
And lastly, a bonus video, how to pay off debt and still live a little!
So there you have it!
Again, I know that's a lot to take in, and it can be daunting. Trust me, I've been there…remember? But these tips will be sure to help you kickstart your debt-free future.