A sinking fund is the only thing standing between you and freedom from paycheck to paycheck living. Here’s how to get started.
Watching the balance on our biggest credit card shrink over the past year has been…how should I put this?
Our main goal in our #yearofno has been to knock out debt every chance we get.
Read all how we’re getting out of debt here (yes, even while raising 5 kids on one income!).
But there is one thing that I wish we had done differently.
Something that could have made a bigger difference in our debt payments.
It’s called a sinking fund. It’s a genius (but uncomplicated) idea that prepares you for those nagging expenses that add to debt.
Living deep in debt can be an awful feeling. But it’s not all bad! Learn why this is the best time to learn great money habits.
Paying off debt is like riding a roller coaster. I mean, sure, it has its ups and downs. But the analogy goes deeper than that.
I’m talking about the anticipation of the ride. (That mix of excitement and dread!) Once you’re on the ride, you can’t always see what’s coming ahead. There’s a lot of screaming (maybe it’s joy, maybe it’s regret). And at the end, you’re happy to get your feet back on solid ground.
Let’s not talk about the people who excitedly get in line to ride it again.
Inside: When you’ve got debt snowball fatigue, it seems like your fight will never end! But a few small changes can make all the difference in your motivation.
Probably the most frustrating thing about paying off debt is that there’s no magic wand to poof that will make it disappear in an instant.
When the day comes that we’re ready to face our debt, we want the fight over as quickly as possible.
Unfortunately, that’s not how it works. (Unless you’re lucky enough find a nice windfall!)
Because paying off debt is such a long process, it’s easy to lose your motivation and even wallow in self pity from time to time. That’s perfectly natural! But it’s not an excuse to continue to wallow for long.
I’d give it a day, tops.
Getting out of debt takes discipline. But there are some things you should NEVER do to win the fight against heavy bills! Are you guilty of any of these?
You racked up some serious debt, and now one thing is clear. If you want to have a different life, there are certain things you can never.ever.do.again.
Don’t worry. It’s all worth it when that magical day comes that you get a paycheck that doesn’t have to immediately be divided up between your un-best friends, credit card company A, B, and C.
What are these forbidden things? Glad you asked!
Once I learned how to find out all my debts (even though I was scared) it gave me the power I needed to take charge of my finances. Learn how you can do it, too.
When you play peek-a-boo with a baby, he thinks you’ve disappeared because your hands are over your face. He’s totally surprised when you reappear by taking your hands away.
Are you playing peek a boo, too? Covering your ears and yelling “I can’t hear you!” whenever someone uses the “d” word (debt, that is) is a ton of fun, but it’s not a game you can win.
After all, you know your debts are hiding behind your hands. But instead of a kind face waiting for you, it’s more like a clown in a haunted house.
Sorry for the visual.
But I know, because I’ve been there. I hid behind my hands for years before life woke me up with a good slap. Don’t do what I did. Living this way means that debt is running your life.
When you’re ready to tackle the process of how to get rid of debt quickly, you’ll need to establish some habits to make sure it sticks. Use these ideas to win the fight.
Figuring out how to get rid of debt requires three things: passion, determination, and a willingness to completely change your life.
You know you’ve got the passion when getting out of debt is all you think about. Your friends and family know about the big goal, and they sometimes mention it when you’re together. “How’s the big plan going?” or “Do you want to just come to my place instead of meeting at the bar?”
Side note: if you’ve got friends and family that are supportive like this, be sure to hold on to them tight!
A sign of the right kind of determination is when you surprise yourself by saying “no” to something you usually spend money on automatically. Because you’re determined to get that debt free life you know you deserve far more than any impulse buy.