It’s January and if you’re thinking that what you want to achieve this year is ‘I want to be debt free’ then read on for my tips.
Usually, after the Christmas blowout, everyone is super motivated to live their best life. But when reality hits, it’s so much more difficult to implement your goals into your lifestyle. I am just over five months into my debt free journey and it’s taught me a lot about goals. So if you are thinking of paying off your debt, here are my tips for giving yourself the best start.
Want to Be Debt Free Tip #1: Be SMART
Use the SMART system. Are your goals Specific, Measurable, Achievable, Realistic and Time Constrained? Or are you giving yourself broad statements like ‘I want to be debt free?’ If so, how are you going to achieve this?
Make it specific by deciding ‘By the time I’m (…), I want to have decreased my debt by £(…)k’. Bear in mind what’s realistic also. By using the SMART system, you must define the goal, how you will achieve it and by when, which helps to form the beginning of your plan.
Want to Be Debt Free Tip #2: Budget
When we started our debt free journey, I didn’t know about Dave Ramsey (we are based in Northern Ireland), or any of the other resources out there. I started with a spreadsheet, listing our debts, our income and our monthly bills and decided how much extra we could afford to throw at our debts each month (link here for how to draw up your budget). This gave me an idea of how long it would take to pay off our debt.
As time went on, I found ways to cut down our bills and make extra income, which has shortened our debt-free date, but budgeting is key.
Want to Be Debt Free Tip #3: Stay Motivated
Keep motivated. I must admit that sometimes its tough to stick to the plan no matter how meticulously I’ve thought it through. So do what you need to do to keep motivated. Have a plan to celebrate when you are out of debt. Tell someone to hold you accountable. Join up with others on the same journey as you e.g. the #debtfreecommunity. Getting into that motivated mind frame takes time to build, too. Allow yourself to build it up the way you would train for a marathon, in that you don’t go out on the first day of training and run 26 miles. It takes time to get to the point of being capable of something challenging.
Want to Be Debt Free Tip #4: Shake It Off
Shake it off when you fall off the wagon. We all have blips. There have been times while paying off debt where I’ve dipped into our Emergency Fund for pizza or to get the car valeted. I like this analogy about failure; say you dropped your mobile phone on the ground. Do you pick it up and hope it’s not smashed? Or do you stamp on it repeatedly until you ensure that it is? Apply this logic to your finances when you have a momentary lapse. You got this.
Hope this helps someone out there! Comment below and tell me your top tip for anyone who wants to be debt free.