I like to listen to the Dave Ramsey show when all those people call in and scream, “WE’RE DEBT FREE!” I have to admit it’s pretty cool to listen to all those stories about paying off debt and overcoming what many probably thought was the impossible. It’s inspirational in many ways.
You definitely have to admire these people. They could have easily given up. They could have filed for bankruptcy. Sure, there were tough times and probably thoughts of giving up along the way, but they did do it. They paid off all their debt.
Do you think there is a big secret to getting out of debt? Have you often wondered if they know something most people don’t know? I once heard a Dave Ramsey with their inspirational debt story. They paid off $50,000 in 22 months to become debt free. So, “how did you do it”, Dave asked? ”What are your secrets?”
They said there were two steps, that enabled them to get out of debt and change their lives.
Secret to Getting Out of Debt – 2 Steps
Budgeting - They created a written budget and put their dollars on paper. If they needed to spend more in an area, they realized they had to pull money from another area to stay in balance.
This couple obviously realized they would never be able to pay off all their debt with out a plan for their money. They created a budget to make sure they were able to make payments towards their debt plan, consistently and on-time. The budget also helped them to keep spending under control. There was no spending ahead, at least not anymore.
Communication - They communicated about spending and made wise money management decisions together. One of them stated, “it’s a liberating feeling to know where our expenses are going.”
Making decisions together is critical. If married, you have to have the same financial goals and talk about those goals often. If you’re not on the same page, try to seek assistance from a counselor or coach that can help you get there. Once you’re on the same page, set up a regular time to talk about money and spending decisions with each other once a week.
Final Thoughts
These two steps to getting out of debt are hardly secrets, but this couple obviously executed on the basics that I think are difficult for so many people. I know there is a lot more that goes into getting out of debt, such as organizing your debts, making phone calls to creditors sometimes, and setting up a good debt payment plan. But, budgeting and communication are the first places to start.
A lot of people I’ve met have trouble with these two steps because they say they take too much time. No so. You can spend 15 minutes before each paycheck setting up your plan. Tracking your spending takes 5 minutes per day, if you do it everyday. Talking about money shouldn’t take more than 20 minutes per week. Too much time? No way!
If you can budget as well as talk about spending decisions steadily and consistently over time, you will accomplish great things with your finances.
What do you think of these two important steps to getting out of debt?
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