The money challenge that 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 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 2: This Checking Account Can Save Your Money
Day 3: Save Money By Finding Awesome Used Stuff for Sale
Day 4: Use a Green Thumb to Grow an Extra Green Wallet
Day 5: How Cheap Meal Planning Can Save You Money and Simplify Your Life
Day 6: Free Things to Do When You’re Stuck at Home
Day 7: How Cleaning My Room Helps me Save (and Make) Money
Day 8: Tired of Food to Go? Easy Ways to Do It for Less
Day 9: The Best Tips for Saving on Utilities
Day 10: The Best Tips for Reducing Healthcare Costs
Day 11: How to Know What to Sell on Ebay and Earn Cash
Day 12: How to Sell Stuff Locally and Make Cash from Your Trash
Day 13: What to Do With That Tax Money
Day 14: Shop Around for Easy Utility Savings Every Month
Day 15: How to Make Money Online for Free
Day 16: The Best Babysitting Ideas for Making Cash from Home
Day 17: How to Stop Impulse Buying in Its Tracks Today
Day 18: How to Get Odd Jobs in Retail Merchandising
Day 19: How to Get the Best Bargain No Matter What You’re Buying
Day 20: How to Find Affordable Insurance
Day 21: Begin Meat Free Mondays
Day 22: Sell Scrap Metal for Cash in Hand
Day 23: Do Paid Market Research
Day 24: General Transcription Opportunities for Earning
Day 25: Teach Private Lessons
Day 26: Get Paid to Be a Food Demonstrator
Day 27: How to Become a Substitute Teacher
Day 28: Start a House Cleaning Business
Day 29: The Truth About Search Engine Evaluator Jobs
Day 30: How to Secret Shop for Pay
Day 31: Brainstorming Money Making Schemes
Stick with the money challenge and change your financial future!
If our family 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?
I'm Jamie, and I want to help you afford a beautiful life with your family. 
I haven’t done a money challenge, just the no-spend ones. I’m interested to see what’s on tap, particularly on the earn more income front.
Great post. We don’t have any credit card debt but I’d like to work on paying down our mortgage and increasing out savings. Can’t wait to see your tips over the next month!
This post reminded me of when hubby and I literally kept our credit cards in ice. We would have to drive home and thaw out the card before we could make any purchase. It definitely got us thinking about the purchase.
Good idea! I’ve done that one before, too. Now I’m just disgusted by the idea of using credit cards. 🙂
No, I haven’t ever particpated in a challange. The challenge I need is to reduce unnecessary spending and increase investment. Our credit cards are a convenience, the way we pay for everything and we pay them off at the end of the month. The same types of bad habits that cause people to carry credit card balances month to month are the things that keep us from saving as much as we should.
Our #yearofno reigned in a lot of unnecessary spending. Though it wasn’t exactly a “SMART” goal, it definitely got smarter as the year wore on. Wishing you a successful 2017!
I used to set myself my own money challenges based on my debts and what was reasonable and feasible to do! It was great having that element of competition and making the small successes and then seeing them add up!
I think they work really well for me, I think I need to do one again this year, I almost feel lost when I don’t have something to aim towards!
Me, too! The years I don’t set money goals for myself, I wander aimlessly. It never goes well.
Monitoring my expenditures monthly helps me keep on track, now if I can only get hubby on board. ha ha! Actually we are on the same page for the most part and being in debt drives us both to distraction.
Good luck on paying off the debt and with the financial success class!