Last time we spoke about the importance of having a special time set apart for talking about our finances. Today I want to share what the process looks like for us. Some of these suggestions may seem like a no brainer, but I’ve always found that it’s the simple things that often make a big difference. Sometimes we get so caught up think about a problem, that me miss the forest for the trees.
- It is best to do have your State of the Family after you’ve filed your taxes and have an idea of what you’re getting back, if anything.
- Get a notebook and pen and jot down all of your upcoming expenses or debt that needs to be paid. (Braces for one of the kids, a car repair that you can’t put off any longer…)
- Figure out how far your income tax will go to paying for those expenses/debt. Don’t get discouraged if it doesn’t go far. In the beginning every single penny of our return (which wasn’t a lot) was used to pay down dept. There were never any “leftovers.” Never.
- Once you determine how much of your expenses/debt can be financed with your return, figure out how much of your normal household budget can be applied to those same expenses/debt.
- On a separate piece of paper, jot down absolutely every single expense that you have. Meaning all of your monthly bills, whether they’re essential like your electric or optional like magazine subscriptions.
- Depending on how much debt you have, determine what needs to get cut in order to pay off your debt. Many times, we had to get ruthless and cut all unnecessary expenses. It’s hard to get rid of your creature comforts like a subscription to Netflix or even eliminating your TV service altogether, but if you’re serious about getting out of debt you may have to take drastic steps.
- Now that you’ve eliminated those expenses, you’ll find that you have a few extra dollars to put towards your debt. If you’re starting out like we did, you’ll have very little extra income to apply to debt because most of it goes to paying bills. I know how discouraging this feels, but don’t lose heart. Every dollar that goes to your debt is another step closer to financial freedom!
- Give everything the once over and celebrate even the small changes that you’re making. Small changes often lead to big changes. It’s all about making headway. Depending on how much debt you have, it could take years to pay it down. But if you stay focused and determined, you will start to see the light at the end of the tunnel!
- Close in prayer and ask God to help you find ways to eliminate debt. Ask Him to bless your efforts as you work towards paying off your debt.
I can’t stress enough how important it is to stay focused and determined. Remember, any progress is better than no progress! Even if the only progress you can make is not incurring any more debt, that’s still an improvement over doing nothing! When we first started the best we could do was being sure not to add to our debt.
I had planned on sharing more about what has helped us become almost debt free, but I realized as I was writing that this post was getting kind of lengthy. I don’t want to lose any of you!
Sorry to leave you guys hanging, but I think it’s better this way. I’ll pick up where I left off next time, so stay tuned! What about you? Are the steps I outlined similar to how your family does things?