Are you struggling to get out of debt? Are you looking for a method that could really help you to dig out from under crushing finances?
Well, I’d like to tell you that you aren’t alone in your struggle. My husband and I have decided this year we are going to do more to speed up the process of paying off our debts.
See, we purchased a new home last year, and we don’t want to spend the next 30 years of our lives paying for it. We have other goals, but we also accrued some debt in the moving process. Because we are anti-debt, we know that any debts we have, need to go as quickly as possible.
So I want to share with you the method we have chosen to dig out of our debt, and I also want to tell you about the steps we are taking to achieve our financial dreams.
Ways We Will Slash Our Debt This Year:
Here is what we are doing:
The Snowball Method
We have decided to follow Dave Ramsey’s Snowball Debt method. The reason is that years ago, my husband and I were swimming in debt. When we were first married, we bought into the typical American mentality which is: buy a new house, buy new cars, and then pay for them over the next 5-30 years. This way of thinking can land you in some trouble when your life suddenly changes.
So our lives changed, our job situations turned, and we ended up needing a way out of debt. Which is why we went with a credit counseling agency, who just so happened to use the Dave Ramsey Snowball Debt method.
The idea is to pay off your smallest debt first. Then you roll that payment in with your next smallest amount until you have all of your debts paid off. We became debt free in two years and managed to stay that way for three years until we decided to move to a more substantial homestead.
Now, we are making sure that we get our debts under control and paid off, so if life changes we won’t be caught off guard.
In short, we are going with what has worked for us in the past, and we believe will work for us now as well.
Ideas for Slashing Your Bills
1. Dissect Your Bills
My husband and I are very thrifty people. Even when we purchased a larger homestead, we barely broke $100,000 for a newer two-story home and 10-acres of land with a developed orchard on it and a fantastic view.
So it isn’t like we are big spenders. Which is why when my husband suggested we take a second look at our monthly bills I almost laughed. I thought, “we can’t get any cheaper than what we are already spending every month.”
Then I thought, “Can we?”
So I got over myself and went through our monthly expenses with a fine tooth comb. I began looking at bills that I might want to do some research on, to see if there were lower rates.
Then I began asking myself if our bills were at a bare minimum. Even though we didn’t have any bills I could necessarily take away, I did make a list of the bills I thought I might be able to get creative with.
So that is where you should start too. Look at your monthly expenses. Is there anything you can just do without? Do you have both Netflix, Hulu, and cable television?
If so, cut your bills. Do you pay for picking-up your groceries at the curb of your grocery store or are your groceries delivered straight to your door?
If so, then save yourself the convenience fees and grocery shop yourself. Do you have a gym membership? Consider giving it up until your debts are paid off and do some free exercise, like walking in the park, until you’ve reached your financial goals.
So you just need to go over your bills with a fine tooth comb. Make a list of bills you know you can cut out and also make a list of the bills that you might be able to get lower.
Then get to work.
2. Shop Around
I was surprised to find that I had specific bills that I wondered if I could get lowered. For instance, I began shopping around for lower car insurance and house insurance rates. When we purchased our home, I just went with the company I had my car insurance through to get home owner’s insurance. I didn’t do a lot of comparing because things were hectic while trying to close on a house.
So I decided that now was a good time to shop around and see how much money I really could save myself a month if I went with another insurance company.
Then I began examining other expenses I have each month. I have two dogs that are both diabetic and blind. They require insulin shots every day, twice a day. This gets expensive since I have to purchase insulin and syringes for them every month on top of their dog food.
So I was surprised when I began Googling their medical supplies needs. I found I could just get the prescription for their medicine and syringes from their veterinarian and could order them online much cheaper, and they would come straight to my door with free or inexpensive shipping.
Again, I encourage you to look at your insurances, medical supplies, electricity (if you have the option of shopping around), and any other bill you think you could potentially get lowered just by changing companies.
Then go with the cheapest option. The service may not be as great, but remember, once you get your debts paid off you can always change back and budget for the higher cost of the service.
3. Haggle
Let’s say you’ve gone through all of your bills, and you have found you have gone as low as you can go with some of your services that you absolutely can’t do without.
Well, that is when you call the services, and you haggle. You need to let them know that you’ve been a valued customer of theirs, but you are facing financial hardship and just can’t afford to pay what you’ve been paying.
Now, realize, some companies might play hardball. If so, let them play. You may even have to cancel your service and try calling them back in a week or so.
Also, you may get one negative answer from one representative and get a completely different response by merely calling back in and speaking with another representative. It is all about being persistent. Companies want your business, and usually, they will try to help you any way they can to keep you as a valued customer.
4. Chat It Up with Your Loan Companies
I realize some people have actual loans that they need to pay off but are struggling to pay them while getting out of debt.
So I suggest that you call your loan companies and see what they can do to help you.
For instance, if you have a car payment, sometimes the banks and loan companies will defer so many payments until the end of your loan. This is a good option if you could take those car payments and throw them towards your lowest debt. It could potentially help you to dig out faster.
If not, sometimes you can get your car refinanced at a lower interest rate, which could also lower your payments as well.
But what if you have a student loan?
Well, my husband and I both have those (unfortunately.) Though I’m grateful to have a college education, and I’m also thankful my loans are not astronomical, they are still a debt on my list that has to be paid off.
But you can also reach out to your student loan companies and talk to them about the best repayment plan for your situation. Sometimes they’ll base it off of your income, and sometimes they’ll defer them due to financial hardship. This could be a good option if you could take the money you were struggling to pay them to get you further along with your debt repayment plan.
Or you may even qualify for a debt forgiveness program.
So it is definitely worth a conversation to any company you have a loan with to see if they can do anything to help you accomplish a lower payment or even defer your payments for a few months, so you can get a jump start at paying off your debts.
5. Begin Your Snowball
Now that you’ve haggled shopped, and hopefully found some wiggle room in your budget, it is time to begin creating your debt snowball.
So you’ll need to look at all of your debts and know exactly what you owe on each debt. You’ll want to put them in order from the lowest amount owed to the largest amount owed.
Then you’ll want to figure out how much extra you can pay each month towards your debt. You’ll begin by paying the smallest debt and then rolling over your minimum payments plus your debt repayment amount until you get all of your obligations paid off.
You just keep repeating the process until you are out of debt.
6. Sucker Punch Your Grocery Budget
Now that you have your debt snowball moving in the right direction let’s get back to slashing more bills in the process of getting out of debt. I’ve shared before on how to save money on your grocery budget, but I wanted to throw a few more ideas out there specifically for those looking to get out of debt.
Basically, you want to give up anything processed because you’ll get less of it, and it will cost you more in the long run.
Then you need to find some cheap go-to meals that you can eat over and over again to keep your grocery budget as low as possible.
Finally, consider making as many things yourself as you can. Make your own laundry detergent, dish liquid, cheese, and many other home products.
7. Deck the Feed Bill
Next, if you have livestock (like I do), you need to get creative on ways to feed them on a budget. Here are some ideas for inexpensive chicken feeds and layer feed options.
Also, consider growing as much of your own animal feed as possible. Something I’m planning on doing is to make cat food and dog food for my pets. It has real ingredients that I already have on hand so it just seems like the healthiest and most economical option for me to keep my pets healthy and fed on a budget.
So look for ways that you can feed your animal friends without busting your budget wide open.
8. Say Bye-Bye to Phone and Internet
Before you think I’ve totally lost my mind, hear me out. I don’t mean to give up your cell phone. You still need to have a way to stay in touch with the outside world.
But if you still have a land line, then maybe you should consider getting it cut off or going with a prepaid landline service like Magic Jack.
Or you should speak with your cell phone provider to see if there is any way to lower your plan. You could also shop around for the cheapest cell service as well.
Also, I need my internet just as much as the next person, but I’m actually in the process of looking into using my cellphone as a hotspot instead of paying for high-speed internet service. I’m not sure which one is going to be less expensive, but it could work out to where I lose a bill and save some money too.
Or if you don’t really need internet service at home, you could always cut it off and go to local restaurants and libraries to use the free wi-fi they offer.
9. Pull Out Your Chef Hat
This is a big way to save from busting your budget. When you decide to use the snowball debt repayment plan, you’ll create a zero dollar budget. What this means is that each dollar that comes in your home will be accounted for.
So if you have each dollar accounted for, but then you decide to go out to eat unexpectedly, then your budget just got busted.
Which is why it is essential to make up your mind here and now that you will cook every meal that you intend to eat (unless otherwise planned) while you work to get out of debt.
Believe me, I know it is a ton of work, but it is worth it to keep your budget intact.
10. ‘Go Green’ Like Never Before
This one is going to take some getting used to and some serious consideration. It is good not to waste. Not only is it better for our environment, but it is also right for our budget.
So when you usually purchase paper towels, consider using flannel cloths in the place of paper towels. They are absorbent and can be washed and reused.
Then you can purchase reusable trash bags, so you won’t have to purchase those when you don’t have money in the budget.
Finally (and this one is a humdinger) but you can purchase or make toilet paper. A lot of people use flannel washcloths as reusable baby wipes.
However, you can also use them as reusable toilet paper. Then you just wash and reuse. If you have a family and it grosses you out to potentially share toilet paper with someone else, then you could color code the flannel toilet paper. This would save you a lot of money and is no different than reusing underwear.
Again, some of these money-saving solutions may take some getting used to. But they can save you quite a bit of money after the initial investment.
11. DIY Your Clothes
When you have a family, a clothing budget can quickly break your budget wide open. Clothing is expensive no matter how you cut it.
But you can use the extra money in your budget to purchase clothing second hand.
However, if you have no extra money in your budget, then you might want to consider taking up sewing so that you can make your clothing.
Now, this is an idea I’m considering only because of how expensive it is to clothe five people. My mother-in-law left my husband and I a couple of her sewing machines, so I figure I should put them to good use.
12. Think Before You Drive
Next, you’ll want to cut down on your gas budget if you can. This means that you will want to think before you get behind the wheel of your car and drive.
So you’ll need to think about where you are going, is it really necessary, and how you can make your trip the most efficient.
Plan out your trip so you won’t need to backtrack and waste gas that could be avoided.
13. Swag Bucks
Along the same lines, you may want to consider signing up for Swag Bucks. This site gives you “bucks” for using them as a search engine and also doing simple tasks every day.
Then you can use your “bucks” to earn real-life gifts, such as gas cards. If you receive enough Swag Bucks, you could potentially help offset your gas budget.
14. Make Those Pennies Answer for Roll Call
I already mentioned this a little above, but you need to create a budget where each penny must answer when you do roll call.
You need to know where each dollar you are spending is going. If you are just randomly spending money, then it is hard to see where you are wasting your funds.
And we all know, money is not easy to come by.
So if you are going to dig out of debt, then you need to track each dollar. That way you know you are throwing every dollar you can at your debt to dig yourself out faster.
15. Chat It Up with Your Electric Company
Not everyone has the luxury of just switching electric companies. Some of us are stuck with the company that covers our area.
But you can call your electric company to see if they offer different plans. They will put you on the usual program where you are charged one flat fee if you don’t specify.
Yet, if you call and ask if they have other plans, then you might find a way to save some money. Some electric companies have programs where they have on and off-peak hours.
Well, if you could figure out how to use most of your electricity during off-peak hours, then you could save a lot of money.
So it is worth checking into that and could potentially save some money in your budget if you are able to change how much electricity you use and when.
16. Say Bye-Bye to Wants
This is hard to do. I like to get my hair trimmed ever so often. I love to get a pedicure during the summer months. I also want to go out to dinner a couple of times a month.
But if I plan on getting out of debt, then I have to give up my wants. Those wants can quickly add up to a few hundred dollars spent every month if you aren’t careful.
So you need to make up your mind that sacrificing your wants on the short-term is worth the financial freedom in the long-term.
17. Set Goals and Go for Them
Finally, you need financial goals. When we initially got out of debt, our goal was to own our home and have a miniature homestead.
Well, we achieved that.
Then life happened, and it became time to move on to a larger homestead. Which is what we did, but we weren’t prepared for some of the hardships you can face when buying a new home.
So we accrued some unexpected debt in the process. This time, we are thinking more long-term. We want to pay off our house early. We want to only pay cash for our vehicles, farm equipment, and anything else we need around our homestead.
But we’d also like to buy a small beach house eventually. When we go on vacation, we like to go to a small, quiet beach on the coast. We’d love to one day own a very inexpensive beach cottage or trailer on the beach so that we could go there anytime we felt like getting away for a few days.
Now, we realize, this will all take time. But we have goals, and we know what we are working towards.
So now you know what method we are using to dig ourselves out of debt and a few of the money saving tips I’m going to apply to our budget and lifestyle to save some money in the process.
But I’d like to hear from you. How do you plan on getting out of debt this year? What are you doing to slash your monthly bills? Do you have any tips?
We love hearing from you, so leave us your comments in the space provided below.
