As Lauren Bowling of financialbestlife.com has said many times over,” paying off debt is not glamorous”. Heck, I wouldn’t even call it fun! In my case, it was barely gratifying and without collateral it’s quite possibly the most soul-sucking endeavor I’ve ever undertaken. (A little dramatic, but really- it sucked.) It’s like renting an apartment: yes, you have a roof over your head, but the flip side is that you’re essentially throwing money in a hole and you’ll never see it again. When you have collateral, like a car sitting in your driveway or a giant TV in your living room, it’s easy to point your finger at that thing and say, “that thing is mine and I’m working to pay it off”. There’s no tangible benefit to paying off this kind of debt. Credit cards and an auto loan have also entered the realm of my finances within the last couple of years, but we’ll talk about those another time. Today we’re focusing on my past debt and how I dealt with that on an already very slim budget.
1. Figuring out just how much I owed.
Heavens to Betsy- this part was brutal. I took a deep breath and opened those nasty envelopes and tried not to cry. When you see those numbers add up, it puts a knot right in the pit of your stomach, but it was crucial to have a definite idea of what my goal was.
2. Gettin’ ahold of those sweet, sweet bill collectors.
As I stated previously, I began by paying $75/month to the insurance company. When I got a better paying job that went up to $100/month and then $125 and then I tacked on another $75/month to pay off my debts with the collection agencies. Over time, the more I earned, the more I could pay monthly. Some months really sucked! I knew it would be worth it in the end to not have that cloud of debt hanging over my head.
3. Altering my budget to ensure I could make those payments.
I was living LEAN for quite some time, y’all. Remember that car accident? Thanks to my boneheaded decision to forgo insurance (at a time when insurance in my state was REQUIRED) I not only had no help from an insurance company once my car was totaled, but I ended up losing my license due to unpaid tickets- one each for the accident and lack of insurance. I either had to walk, use public transportation or ask friends for rides. Not having to pay for a vehicle, gas, or insurance is a surefire way to save money, but it’s also a huge bummer. I got rid of cable and started a FREE Netflix trial. I called my internet provider and got a lower monthly rate and I picked up as many extra shifts at work as I possibly could. Earning more + spending less= more money for paying off debt/adding to your savings/etc.
4. Buckling down and sucking it up.
The mental portion of paying off debt is arguably the most important, because LAWD HAVE MERCY paying off debt is difficult. There were so many refused invitations to dinner and drinks. For several years I was only able to travel home to see my family once a year. I couldn’t save enough money to buy another car and get my license back until I was 23 years old! Without a whole BOATLOAD of self-control and a strong desire to get myself out of that hole, I never would have accomplished what I did.
Even thought my first foray into debt payoff was- at best- haphazard and disorganized, I am still so, SO proud of myself! What I did above is not the best way to tackle debt and when I touch on budgeting later in this blog you’ll be able to see the mistakes I made during my first big payoff and how to more efficiently get rid of your debt. The (non-existent) method I used to pay off debt the first time around was effective, but looking back now I realize that I made things more difficult for myself! I blame it on being young and inexperienced (read: STUPID) as far as money and personal finance were concerned. 😊
Regardless of the unnecessary struggle I put myself through, I have to say that the feeling of being debt free is AMAZING and I learned a lot about myself and money in the process.