DEBT MOM WANTS TO KNOW: DO YOU FEEL OVERWHELMED AND BROKE?

If you’re trying to figure out how to pay off your debt when you’re already broke, exhausted, and a little panicked… you’re not alone.

In this post, I’m going to walk you through a simple 5-step plan to help you get back in control, even if money is tight right now.
And trust me… if I had a magic wand to wipe everyone’s debt away, I would. Wouldn’t that be nice?

Debt can be both physically and emotionally exhausting! This is the part of being in debt that no one really likes to talk about. To be completely honest, real change doesn’t happen overnight. And getting out of debt takes not just a mindset shift, but actual change. You’ll need to change how you view money.

So let’s start there.

There’s never going to be a perfect solution to your situation, and things take time. So setting realistic expectations for getting out of debt is healthy. You really need an actual plan to help you set a foundation towards financial freedom.

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The first thing I tell my clients is this:
track every single dollar.

You need to know where your money is actually going. Because once you see it clearly, everything will start to make more sense.

You’re going to start tracking your money like it matters, because it does!

This is the same 5 step plan I use for my clients, as a way to become debt free. Maybe this can help you too! I’ve seen this work, even for people who felt completely lost. The important thing to remember is to have a plan and stick to it. Knowing that it won’t fix or change things over night, but it will help you to create healthy new habits, that will help you get out of debt, and stay out of debt!

Step 1: Stop bleeding money and track your spending.
Before you can get out of debt, you need to address HOW you’re spending all your money. This means, if you have credit cards, lines of credit, personal loans, you need to stop spending. Nothing else gets added to your debt balance. It’s time to stop bleeding money.
If you want to start simple, track your spending for just one week. That alone will open your eyes more than you think.

Step 2: Be honest and work with real numbers.
That’s right, no guessing. I want you to use actual amounts. Here’s a list of what you should include and be tracking:

• Rent or mortgage
• Utilities (power, gas, water, internet)
• Car payment + insurance
• Groceries
• Minimum debt payments
• Subscriptions + extra spending (pets, hobbies, entertainment etc.)

Write it all down, the key is to be honest and track everything.
From past experiences it takes my clients about 3 months to really find out what all their spending truly is.

Step 3: Have an actual game plan.
This is where it gets interesting, and fun. Most of the time, it comes down to a gap between income and spending, and that’s something we can fix. This is where things begin to come back under control. Knowing what you need to pay off, will give you a direction on how to approach your personal debt issue. There are 2 very effective ways to slay your debt. You can choose the snowball (smallest balance paid off first) or the avalanche (highest interest ratio paid off first) approach. And that path might be different for each individual situation and person.

Step 4: It’s time to find money.
I’m not saying check the sofa cushions, or phone booths for loose change, but find money that you’ve been spending that you can cut out. Cable is a good place to start, premium channels, and other subscriptions. You can cancel or stop these expenses for a period of time, while you’re tightening up spending, and trying to tackle debt. Chances are once you’ve let them go, you won’t really miss them and once you’ve paid down some debt, you’ll probably realize that you were able to survive without them.
Cutting out dining out, coffee, drive through food, even by half can drastically help and create found money.
That found money will then be repurposed to paying off debt using either the snowball or avalanche method.

Step 5: Now you’re ready to build an emergency fund.
I know it might seem counterproductive to have money in the bank while being in debt, but this isn’t a fully funded account. A good starting point for an emergency fund is $500-$1000, to be set aside for a true emergency. So many times, people have an unexpected situation happen, and no emergency fund, and then the credit card is used, and that begins the cycle of having a debt balance.

With these 5 steps, you can start taking control of your money and move toward becoming debt free. It will be a slow going process, but you’re creating a new and healthy set of habits that will help you on your financial journey.

For some, they might need an extra bit of help to stay on track, and Debt Mom is here for you too. I offer a personalized service, one-on-one, a hand to hold to keep you on track, throughout your journey to becoming debt free.