Paying Off Debt – Do you wish could but maybe you’re not sure how or honestly you’re not sure if it will ever happen? This Episode of Fulfilled – The Podcast was made for you. I’m going to walk you through a step-by-step process to pay off every last debt that you have. Credit card debt? Yep. Car payment? Yep. Student loans? Yes ma’am. That couch that you bought on zero percent interest? That, too! Let’s dive in and talk about paying off those debts, my friend! 

• You have to decide that you want to be debt free. You have to decide that being debt free is worth it. This is arguably the most simple in theory and the hardest step in practice.
  Whether you are hundreds of thousands of dollars in student loan debt, struggling to pay the bills and facing bankruptcy, or you’ve realized that credit cards and zero percent interest are not blessings to your financial future – you’ve got to decide that you are willing to both sacrifice temporarily for the greater good and change your habits. These two things are pivotal.
  Paying off debt requires you to use that pesky word NO – saying it to yourself and to others. It requires that you change your habits, stop reaching for credit cards, stop getting suckered into zero percent interest, because there really is no such thing – and start living your life in a way where you plan for things like purchasing couches and cars and that trip to Jamaica! Ok… once you’ve decided and you are ready to change those habits, the first thing to do is to…
• Save $1,000 for those OMG Moments. “OMG Fund”. It’s a fund for emergencies, things that make you say O.M.G. These are things like Broken dishwashers, car repairs, broken ankles and necessary, but surprising home repairs. The OMG Fund is NOT for designer purse sales or home renovations that aren’t necessary to keep your home livable or can be planned and saved for in advance. I recommend saving $1-2,000 in your OMG Fund. This helps you to avoid borrowing money when these OMG events inevitably happen during your journey to debt-freedom.
• Stop Borrowing Money. OK – you’ve decided debt is not a blessing and you’ve saved up your OMG fund as a cushion between you and the world… now you have to stop borrowing money. No Credit Cards for emergencies (you’ve got the OMG Fund for emergencies, remember?), no home equity loans, no leasing cars, no zero-percent financing anything, no student loans, no. Borrowing. Money. At. All. You cannot get out of debt and right your ship financially while you’re still taking on water. OK… now that you’ve quickly saved $1-2,000 and committed to not borrow any more money at all…
• Use the Momentum Method to Pay Off All of your Debts. List your Debts by Payoff Balance – Gather up all of your debts. least to greatest – and then… pay minimum payments on everything on your list numbered 2 and above… and the first debt on your list, the one with the smallest balance, becomes public enemy number 1. Make maximum payments on that debt.
  Maximum payments? Yep – that means every single dollar that you can find in your budget goes to that debt each and every month. That means that found money – in a card from your godmother, the coins between the couch, any money you have coming in – goes to that debt.
  And, when you are using the momentum method to pay off debt – once you pay off debt #1, that maximum payment shifts to debt #2 and, while paying minimum payments on everything else you pay maximum payments on number 2. This way it keeps the momentum and you get a series of small wins at the beginning. It helps you to stay focused and to stay the course. This method works! It focuses your energy and gives you literally the most bang for your buck.

What do I mean when I say every single dollar that you can find in your budget goes towards Public Enemy No. 1 debt? I want you to trim your budget. I want you to challenge yourself to live as frugally as possible, because the less you are spending on food the more you can put towards the goal of paying off that debt. I want you to sell things on Craigslist and Facebook marketplace. I want you to cancel subscriptions. I want you to be eating hot dogs and macaroni and cheese or buttered noodles or beans and rice. How far you cut your expenses is the biggest determining factor in how fast you make progress towards your goal of debt freedom!

Here’s the thing about paying off debt – it’s not super fun in the trenches – it’s hard. It can be a long road. There are sacrifices and NOs and yes, it can seem easier to just stay stuck. To be deeply in debt. To not make progress towards your ultimate financial goals.

But…. Once you pay off the debt. Once you walk out of this hole and decide that you are never going to borrow money again. Once you save a bigger OMG fund (after all of your debts are paid in full)… then, you can loosen up that budget. Then you can live your life full of YESs that you want. Then you can have control of your income. Then you can save quickly for things like car purchases and downpayments or gasp cash purchases of homes. You can go on great vacations, paying cash, ones that don’t have a payment plan that follows you home. You can go out to dinner as much as you want. You can save for retirement with gusto and help your kids attend college debt free. All of these things and more exist on the other side of a season of temporary sacrifice. The life you are dreaming of where you aren’t strapped financially. The life you are dreaming of where you get to make decisions based on what’s best for you, your partner, your kids and your family… it’s on the other side of buckling down and getting debt out of your life forever.

Debt isn’t a blessing. There’s no such thing as good debt or bad debt – interest is stealing your lunch and it’s paralyzing your ability to live your dreams of financial freedom.

This journey may not be the sexiest or most exciting – although that endorphin rush after paying off these debts as you move through them one at a time in the Momentum Method us pretty great – but what is SO exciting is being able to live the life you’ve always dreamed of. The one where you get to decide where you want to spend and give and save your money instead of being subject to dolling it out one minimum payment at a time. The one where instead of paying interest you can save and invest and earn interest instead. The one where your money works for you, not the bank or the car dealership or the furniture store!

That life is not only possible, but it’s the one your destined for if only you will decide that you want to be debt free and change your habits! You can do it and I’m here cheering you on and I’ll be back next week sharing more tips all about budgeting, which will help you to make that happen!

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