It's time to stop feeling like you're drowning in your debt! Learn how to get out of debt fast so you can reach those financial goals and dreams even faster!
Debt is no joke! It can hurt your credit score and can make you feel trapped! Seriously, debt can make even the smallest decisions become hard or impossible. But debt is sneaky! When you first go into debt, it may seem like it's helping you… Giving you an opportunity to do something you may not have been able to do before. However, it becomes overwhelming if you don't pay it off quickly… We've been there, so we know exactly how helpless and scary it can feel!
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Don't worry, there's a light at the end of that dark tunnel, I promise! I'll teach you how to get out of debt using three of my simplest and BEST budgeting principles. Plus, I've got some extra tips to help you crush your debt that much quicker! AND we've made some super handy free printable debt trackers for you to stay on track and focused. But first…
A LITTLE BACKSTORY
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.
HOW WE GOT OUT OF DEBT
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 was the $1, $5, and $10 daily decisions that made all the difference.
We managed to get out of $15,000 of debt… in one year, on a $31,000 salary!
Today I'll share three of the biggest principles I used (plus a few extra tips) to help our family get out of debt. I love sharing these tips to help families. In fact, this blog and my Budget Boot Camp program (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 they can help you, too!
And wouldn't you know, it's simpler than you think!
HOW TO GET OUT OF DEBT
Alright, we're going to break it down for ya! Watch the video over how to get out of debt online HERE, or click to watch the video below:
Now, on to our best tips that will help you to get out of debt…
STEP 1: REDUCE YOUR SPENDING
The first step to getting out of debt is pretty straightforward, but sometimes hard to put into action! Reduce your spending. Seriously, it's as simple as that! If you can reduce your spending and cut out anything that's not essential, then you will immediately cut down on the amount of debt you're working yourself into! Plus, it'll give you a little extra moola to put towards your payments.
STICK TO THE 70% BUDGET RULE
The 70:20:10 budget rule is a simple concept that works no matter what your take-home income is! Basically, you figure out what 70% of your monthly take-home is and you keep all expenses within that 70%. Yes, it may be hard. Yes, it really will work!
Once you get that figured out, take 20% of your monthly take-home and put it all towards your debt using the snowball method. In other words, while still paying the monthly minimums, put all extra money toward paying off your smallest debt. Once it's paid off (yay!), take all of that money and put it toward your next smallest debt. Do this until all of your pressing debts have been paid off. You'll be amazed at how quickly you'll be able to tackle it!
We have a lot of great ideas on how to look at your finances, start a budget, and reduce your spending. Once you you know where your money is going, you're ready to take it to the next level!
DO A SPENDING FREEZE
A spending freeze is exactly what it sounds like…you freeze or withhold from spending any money for a specific period of time. Then put the money you would have typically spent during the freeze toward debt (or a specific savings or financial goal once you're debt-free).
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 a spending freeze for just one week at a time to start.
Seven consecutive days, that's all! It's a short enough amount of time so you can do it with little to no preparation, but it's long enough where you will save a substantial amount of money in that time. You can do it! I've got even more details and specifics in my spending freeze post, along with a video, so be sure to check that out before you do your own spending freeze!
STEP 2: ORGANIZE YOUR MONEY
Once you reduce your spending, then it's time to get that money organized! Most of us have two accounts — one saving and one checking. Have you ever considered opening MORE accounts to help you organize your money better? I think that every family should have at least 7 bank accounts! It sounds CRAZY, right??
This is one of the most viral concepts I've ever had…and for good reason. This is one of the single easiest things we did to get out of debt fast. And you don't have to have lots of money to do it. In fact, we were living paycheck-to-paycheck at the time when this started working for us!
Organizing your money allows you to see exactly how much money you have in the bank and gives it a purpose. Once it's organized, then you know how much you have for your monthly budget and how much extra is available to throw at your debt.
STEP 3: TRACK YOUR SPENDING
Alright, so you've reduced your spending and you've gotten your money organized… Now what? Probably our favorite and best tip to get out of debt is to start tracking your spending! This makes you aware of exactly where every penny is going.
This may sound daunting, but you can divide up the spending responsibilities with your spouse. That'll really help take all the pressure off of just one person! Once you get that divvied up, it becomes a lot easier to track everything.
HOW TO TRACK YOUR GROCERY BUDGET
Did you know that second to a mortgage, the average American's grocery bill is their next highest bill?! Astounding, right? But think about how much your grocery bill can be every time you go to the store… and then how many times you go to the store each month.
Do you believe me now? Getting your grocery budget under control is easily the BEST thing you can do to get out of debt fast. Stop throwing your money down the garbage disposal, literally! It may sound crazy, but I suggest a grocery budget of $100/person each month, starting at $300 a month.
This means if you have a family of four, your grocery budget is $400. Break your monthly budget down into a weekly budget and it'll become so. much. simpler. to track! If the month has four weeks, then your family will have $100 to spend on groceries per week. That may seem like a challenge, embrace it!! See how far you can stretch your grocery budget!
Keep track of how much you're spending at the grocery store (on all consumables, like groceries, toilet paper and cleaning supplies). Try to stay under budget so you can apply any extra money you were spending weekly at the grocery store towards paying off debt.
Now you know my most important principles about how to get out of debt, let's go over a few extra tips to help you go that extra mile and tackle your debt even quicker!
PUT THE BUDGET PLANNER TO WORK
Did you know I've designed my own Budget Planner to help keep track of all your finances?! It's been a game-changer, for sure. It puts all of my best principles into one super easy-to-use and organized place.
HOW TO GET OUT OF DEBT FAST
Okay, you've started applying the above principles to your finances, but you want to take it a step further and really see that debt drop. Here are a few more ways to get out of debt as quickly as possible!
INCREASE YOUR DEBT PAYMENTS
Did you know if you only pay the minimum required on your debt payment, you're probably barely even touching the principal? The debt keeps growing if you don't tackle it and pay it down quick! Here are some of the best ways to really get out of debt quickly.
- Pay MORE than the Minimum Payment – If you want to get out of debt fast, then start paying more on your principal each month! It doesn't matter if it's a little or a lot, anything extra will go a long way.
- Start a Side Hustle – Increase your income with a side hustle or gig job. Then, take whatever money you make from those and put it all towards your debt!
- Snowball your Debt – Start with your smallest debt and throw all of your extra money at it until it's paid off (while still paying the minimums on all other debt). Once that's paid off, take all of the money you were throwing at your smallest debt and put it toward the next smallest debt. Keep doing this until you've paid off your debt!
- Sell Things You Don't Need – If you have items lying around your house that you don't ever use, sell them! Have a garage sale or sell them on Facebook Marketplace. This could be anything from the decor you no longer use to your couches or car. Don't be afraid to get scrappy! Take all that money you earn and put it towards your debt.
- Make Some BIG Sacrifices – Want to know how to get out of debt the quickest? CUT OUT ALL POSSIBLE EXPENSES. We're talking haircuts, eating out, entertainment, and fancy food from the grocery store, to name a few. If you don't absolutely need it to survive, then don't pay for it right now! Yes, it will be hard. But it will only be for a little bit and it'll be worth it to become debt-free!
USE OUR FREE PRINTABLE DEBT TRACKER
While you're slaying that debt, it can be hard to stay on top of it all and feel like you're actually making progress. A debt tracker is the perfect way to keep up with everything! Lucky for you, we've made a few that will rock. your. world.
Simply figure out what your goal is and divide it by the number of trackers on the page. Once you pay off that amount, color in a tracker! It will feel SO good when you start visually seeing how you're paying off your debt. Feel free to break your debt down into a few months at a time if that helps you feel more accomplished. Just print off more debt trackers until you've crushed it all.
HOW TO STAY OUT OF DEBT
Once you're out of debt, you'll want to stay that way! Here is the number one principle you need to understand to make sure you never end up in that scrappy position again…
NEVER SPEND MORE THAN YOU EARN
Sounds pretty basic, huh? Develop smart, frugal habits to help you save money and reach your financial goals. Here are a few of my favorite frugal living tips to help save money!
- Make Savings Goals – Once you're out of debt, don't stop saving your money! Start building up an emergency fund and other small savings funds to help you be prepared for whatever comes your way!
- Become a Shelf Cooking Pro – Stop going to the store for every ingredient a recipe calls for and start shelf cooking, using what you already have! Developing smart meal planning habits and learning how to shop your fridge and pantry shelves will help you save so much money.
- Save Money on Bills – What? Did you know this was a thing?! We've compiled the best tips to save some moolah on your heating and electricity bills you definitely don't wanna miss out on!
- Live Frugally – Our family's frugal living is what helped to get us out of debt fast… So much so that we still live that way to this day!
I know some of those sound daunting, but they're guaranteed ways for you to get out of debt fast!
I EVEN TAUGHT RACHEL RAY HOW TO GET OUT OF DEBT!
Yes, you read that right! 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!).
They compiled clips from my debt segment that you can watch online or click and watch below:
If it's good enough for Rachael, then it's good enough to help you get out of debt! 😉
LET BUDGET BOOT CAMP HELP YOU GET OUT OF DEBT
If you need more assistance and hand-holding, Budget Boot Camp to do all the heavy lifting for you! All you need is a screen and you're set!
And don't forget, if you don't save at LEAST what you paid for the program, I'll refund every dime. Use the code FCFBLOG to get an extra 10% off, because I love you 😉
HOW TO STILL LIVE A LITTLE WHILE PAYING OFF DEBT
Just because you're on a journey to becoming debt-free doesn't mean you have to sit around the house, twiddling your thumbs for fun! We are living, breathing proof that you can still enjoy your life and find fun, free things to do in your area. Invite your friends over for a game night after dinner, have a free date night with your sweetie, easily find free things to do around you that are still super fun!
No more dropping loads of money to have fun, especially while you're paying off debt. Change your way of living and even once you're debt-free, you'll still be living the frugal life that keeps you where you want to be in your life!
Now, get out there and kick that debt in the teeth!
Don't miss out on these other great articles!
- Set some financial goals you want to hit once you get your debt paid off!
- Yay, you've reached your goals! Now what? Celebrate your successes and treat yourself!
- Looking to start a budget but don't know where to start? We've got your back!