This brand new 30 day money challenge will set you up for success in paying off debt.
One year ago, my Hubby and I discovered a fatal flaw in all of our carefully laid plans. We were good at setting goals for ourselves each year, but we were struggling to meet them. Something was holding us back from everything we wanted to accomplish.
That something was a nasty habit called Debt.
We could see in black and white that nothing could really be accomplished until we knocked out our credit card debt. Only then could we make big changes in our lives.
So we adopted a new lifestyle we call #yearofno. That might sound like we went a whole year without buying anything, but the reality is far more doable for everyone. This motto helped us to carefully evaluate every purchase. We began with a “no” and would only spend the money if we were thoroughly convinced that it was worth our yes.
We aren’t out of debt just yet, but we have paid off more than 80% of our goal for the year. We’ve learned so much along the way.
One of the biggest lessons we’ve learned is that it’s more important to set yourself up for success than it is to pay down a debt number. If we can’t teach ourselves to learn to live without credit cards, it won’t matter how quickly we pay them off. Because we’ll find ourselves living with them again all too soon.
What’s the best way to pay off credit cards?
Begin by not using credit cards! Lose certain words from your vocabulary. Phrases such as “Oh, I’ll pay it right back.” “This sale is too good to pass up.” And even, “But this is an emergency!”
Wait, not even for emergencies? How am I supposed to pull that off?
You need to convince yourself to stop using the cards no matter what. The best way to do that is to set up an emergency fund and a sinking fund.
It may seem like you should throw everything you can find at the debt to get rid of it as fast as possible. And if you have a small amount of debt, that’s not a bad way to do it. But if you’re looking down a long road of one year, two years, or even longer, you don’t want to skip these essential steps.
Why Are Emergency Funds and Sinking Funds Important?
Having an emergency fund on hand is easy to understand. You should have a bare minimum of $500 in a savings account so you can access that in a true emergency. This will teach you to stop reaching for credit cards in times of trouble.
Sinking funds take a bit more explaning, so you’ll want to read How to Build a Sinking Fund and Get Out of the Debt Trap to get a better understanding of what they are and why you need one.
Before You Give Up
It sounds complicated to find the money for emergency funds and sinking funds. And then you still have to find more money to pay off the debt. How could you ever hope to get ahead?
Don’t quit before you begin! I’m here to help you build up those funds quickly so you can get down to the task of paying off that debt that hangs around you like a noose.
The 30 Day Money Challenge
I’m dedicating the month of January to a new challenge. It’s called Secure Your Savings and Find Peace in the New Year. In this 30 day money challenge, you’ll find tips to save money and earn more income so you can fill those accounts.
I love the fresh start of a new year. So let’s kick 2017 off right and jump into this challenge with both feet! Don’t be discouraged by Christmas bills that start rolling in. Instead, picture yourself a year from now. You’ve stopped living paycheck to paycheck. In fact, you covered all your gifts with a cash account you’d built yourself.
I’m super excited about what this challenge can mean for you and for me. We’re going to accomplish big things in January!
To make sure you keep up with the challenge, sign up for the special mailing list. This is not the list for my weekly subscription, but a list that will receive emails related to the Secure Your Savings and Find Peace in the New Year 30 day money challenge. It’s the best way to make sure you don’t miss a post.
Posts in the Series
Day 1: Set Yourself Up for Success
Day 13: What to Do With That Tax Money
Start 2017 off on the right foot!
If we can change our spending habits and make a big difference in our lives, I know you can do it, too.
Have you ever participated in a money challenge?