How To Get Out Of Debt And Stay That Way

How To Get Out Of Debt And Stay That Way

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Today it’s all about how to get out of debt and stay that way. Oh, wait, I can hear some people saying, “I can barely make ends meet.” I get it, I really do. I will say this, there are tricks to getting out of debt and stay that way. My first recommendation is to set a budget. A reasonable budget. You can start by writing down what your net income is (the amount you bring home in your check), then list all your debt/bills. If you have student loans, car loans, or credit cards write the interest rate next to the debt.

If you own a home, write the interest rate down on that debt as well. Make a column with your take-home pay on the top. This makes your DEBT real. You can write the balances each month as well, if that helps you. Here is an example for you:

Net income: $3000.00

House/Rent: $1000.00  4.5%

Car: $300.00     2.00% (this rate can be higher or lower depending on your credit score)

Food: $400.00

Utilities: $200.00

Student Loan: $200.00  8.00%

Cellphones: $100.00

Cable/Internet: $100.00

Savings: $300.00

Misc: $200.00

Credit Cards: $200.00  12.00%

Now, the first thing you’re going to want to do is to pay off the highest interest rate payment first. In this scenario, it is the credit cards. That would be the first one to eliminate ASAP. Please don’t ever pay just the minimum balance. It will be a 20-year loan, if not more, in some cases. Now, after the credit cards are paid I would apply the amount you were paying on the credit cards to the car payment. Get rid of that debt.

After the car is paid off, apply the amount you were paying on the credit card debt AND the car payment amount to your student loan, and get that debt paid off ASAP. Before you start this debt reduction, look at your cable bill. Can you cut it? Please look into Netflix, Hulu, or whatever movie channel(s) are available in your area. If you can cut out some or all of the cable expenses use that money towards your debt. Once you cut out all your debt, pay whatever you can on your home, if you are buying your home. DEBT FREE is awesome.

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Another really good tip to think about is writing down what you spend. It’s like dieting but with dollars instead of food. If you know what you’ve eaten you will know why you haven’t lost weight. The same goes for spending, write down what you are spending your money on. It’s hard when I hear friends say, “I can’t afford to do that.”

What they are really saying sometimes is this, I want to have debt and get my nails done, a pedicure, and buy clothes every two weeks or whatever. Oh, and the kids love a soda every day. You know, we just need to get out of the house. If we use this attitude, we will always have debt. It’s a fact of life. What money comes in, can only go so far toward our monthly expenses.

We as adults set the stage for our kids, whether it be spending money like crazy on new clothes, new shoes, etc. If your children see you spending money like your purse or wallet is overflowing with money, they think that is normal. It is not. Please do not buy “stuff’ to make you happy. It’s not worth it, trust me.

Here are some things to think about:

  1. Do I really need this? Am I buying this trinket or sweater to make me happy? Put it back.
  2. Skip the drive-through for dinner.
  3. Start your dinner in the morning in a slow cooker or whatever works for you. This will stop the impulse of picking up dinner on the way home after lessons or work.
  4. Making a budget for that morning coffee or soda drink is critical (it will come out of your grocery bill-YIKES).
  5. Don’t think of keeping up with the Joneses. Trust me, they may have tons of credit card debt to make the world think they are awesome. I did loans for over 20 years, I know.
  6. Only buy the amount of food you will use. Wasting food is wasting $$$$.
  7. Maybe a new car is not really needed, is the car you have still working with minimal repairs?
  8. You have one coat, do you really need one more?
  9. You have four pairs of shoes, how many more do you really need?
  10. Decide what you really NEED to purchase every month. Please remember that financial security for the long term is the best life you can achieve.
  11. Be prepared for the loss of income. Please save at least six months of net income, a little at a time.
  12. Use coupons whenever possible. Processed food is not healthy, sometimes they have coupons for salads, watch for them. I have seen coupons for buy one salad get one free.
  13. Buy food in the bulk bins if they are cheaper at grocery stores if you like what is offered. If not, pass them by since the food will end up in the garbage can.
  14. Live below your means, not within your means but below. If you get a raise, put the money in your savings account.
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Now, here are some ways to cut a few expenses I haven’t listed above. This is a simple but easy way to see how far your money is going each month. I have an envelope for the following items:

  1. Haircuts (go to salon schools when possible)
  2. Date night (decide on an amount that will fit your budget)
  3. Thrift stores for clothes or accessories
  4. Groceries, learn to cook from scratch
  5. Food storage purchases (out of your allotted grocery amount)
  6. Gas for the car

Now, once these envelopes are empty, the money is gone until the next month. Please tell me your ideas for “getting out of debt and staying that way” thoughts. I love to hear from you, let’s share our ideas with the world. This is one more way to be prepared for the unexpected. May God bless this world.

101 Ways You Can Budget

Linda’s Book: “Prepare Your Family For Survival”

Copyright pictures:
Dollars: AdobeStock_83892551 by Justasc

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  1. I am on Disability but I have been able to find a part time job that I can work a few hours a week. The
    “extra” money I have put towards my bills. I have paid off 2 bills and am working on another one, then on to the Credit cards. This has helped me out so much. If I had to live on my disability I would be in the streets. Like you I encourage people to stock up on food cause you never know. You can not depend on the government, you have to take care of yourself. When you get paid set back a dollar or two or whatever you can.” Hide it” don’t spend it, but add to it a little at a time. I am on budget billing with my monthly bills which help BUT they are going up too. So I thought I was getting ahead but no. At least I have those 2 bills paid off and I Thank God I got them gone.
    Your statement about cooking from scratch is so true. I went to McDonald’s a few weeks ago. I
    had a BOGO coupon for a Big Mac, I thought with this coupon I can afford French Fries too. I got 2
    orders. When I went to pay for it before the coupon it was 15.00, actually not much better after the coupon, it was still over 10.00. OMG I could have done so much better at home. From now on when I want hamburger and French fries I will make them myself, no more McDonald’s. For that price I could have went to a local pizza place and got a whole large pizza. I don’t see how people can eat out all the time. If they have a few kids I can see 30.00 for a meal, COOK YOUR OWN.
    I will admit I do go out to eat BUT what I do is this. I do survey’s on a site “”
    and when you get enough points you can get gift cards. I have gotten them for Red Lobster, Buffalo Wild Wings just to name a few but also you can get gift cards for places like Walmart and Lowes.
    These survey’s take 5 or 1o minutes a few are a little longer but you can earn more points. So to me it’s worth it to take a few minutes and earn points.
    To help save on my groceries I go to a “salvage” store. I got 2 or 3 boxes of cereal for 1.00 a piece. So the boxes were a little dented, I don’t care. If I look and they date is still good or within a good amount of time I get them. You don’t have to buy anything you don’t like but you can save so much money.
    Keep up the good work Linda, you have support all over the country .

    1. HI June, you always make my day, my friend. Hugs! You are so right how do people eat out all the time…I do not get it. I’m with you I will use coupons and then I will say to my husband “we are never eating here again” I can make this cheaper at home. I love your idea about the “”, a fabulous way to get gift cards that can be used for the items we really need. I tip my hat to you! Thanks again, Linda

  2. Do NOT give up your credit !!! We have been debt free for 13 years – no mortgage, car payments, or credit card debt. We always thought we could borrow against our home if we absolutely had too. Now we know that is not the case. Because, we have no credit – we have no credit score. Be careful what you wish for!

    1. Hi Beth, congratulations on being debt free for 13 years. I worked in credit doing car loans, boat loans, and mortgages for 25+ years. An experienced loan officer can help you get credit. Your utility bills can be submitted to the three credit bureaus (yes it may take a few weeks) and if the utility companies show you have paid on time you will then you will have a credit score. Unfortunately, if you still had a mortgage your credit score would be very high because of the bureaus liking of on-time mortgage payments. But you can still get a loan, especially a mortgage, the banks love good collateral. Your loan to value would be very low, banks love that. Good job with your debt, Linda

    2. I suggest opening an account at a credit union. I’ve been debt free (with a new house I built) since ’03. My Big Bank probably would never lend me money: I have no record of making payments anymore (except for Kohl’s). But I have a credit union account…and they would lend me money. They actually Like people who don’t carry debt! And, yes, give credit for paying utilities, insurance, etc on time.

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