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Figure out how to get out of debt with these steps, and start living the better life you dream about. The #yearofno technique is what you need to succeed this time!

Have you ever tried a “get out of debt plan” that just didn’t seem quite right?

Most of them work great on paper.

But they don’t always pan out when the real world sets in and throws you for a loop (one you could never have anticipated).

That’s why you need a better plan.  One that works even when nothing else seems to be going your way.

It took some time to work out the kinks in this plan, but our family finally figured out the right tricks.  Things that let us pay off thousands (and thousands) of dollars in credit card debt.

While raising 5 kids.

On one income.

Today I’m gonna share those tricks with you.  I know that this debt free plan can work for you, too.

(Unlike those other perfect on paper plans.)

Because the last thing I want you to do is quit before you even get started.

Where Do I Start To Get Out of Debt?

Rule #1: Have A Why

The very first thing you need is a good “why”. 

Like Curly from City Slickers, I can’t tell you your why.  Only you know that. 

But you need to figure it out, because it’s what you’ll cling to for months (or years) while you pay off debt.

Before you click play…language warning!

If this “why” isn’t amazing and emotional, you might as well forget about getting out of debt. 

So dig deep and figure out why your family needs to escape credit cards, car payments, student loans, or whatever bills you hope to lose.

Your why can be big or small, but it must be significant to you.

• So your kids don’t repeat your mistakes.
• To take that dream vacation
• Because you want to move to a better home.
• You want to stop being afraid to check the mail.
• So sleep becomes your friend again.

Once you know your why, cling to it.  Make it your mantra. 

Put up a collage next to your bed so you start and end your day with a new life on your mind.

Rule #2: Learn The Best Way to Pay Off Debt

Now that you know your why, figure out your how.  What debts do you have? 

If you aren’t sure exactly what money you owe, follow the same steps I took when I learned how to find out all my debts.

Write down all of them, and pay attention to how they make you feel.  You’ll need passion to get you through the first pay off.

Some Good Options

1. Use that anger for good!

Which debt makes you feel the strongest emotions?  Maybe there’s one bill that makes you angry.  Or maybe a small balance makes you feel confident that you could get rid of it quickly. 

2.  If you’re analytical, you might be most encouraged by killing the payment with the highest interest rate.

Tackling the highest interest rate first makes the most sense mathematically.  But if you don’t feel passionate about paying that debt, you’ll quit before you really begin. 

So in the long run, it’s most important to choose the card with the strongest mental win for yourself. 

You’ll need that emotional high to power you through.

(After all, saving money on the interest rate will do you no good if you don’t follow through with the plan!)

3.  Go big.

We chose to pay the biggest debt first, because we knew that if we could get rid of that beast we could do anything.  I call this the “king of the world” option.

Rule #3: Find the Cash

First of all, most of us have more money than we think. 

If you spend money at a drive thru, or on magazines, potato chips, or fancy clothing, then you have money to pay off debt.

Our favorite free tool (that’s perfect for catching your extra spending habits) is Personal Capital.  You’ll be able to see at a glance when you start to overspend on one of your budget categories. 

It’s great for people who just don’t have time to watch every penny.

Sign up for a free Personal Capital account!

Rule #4 What’s A Motto With You?

We didn’t understand the power of having a motto…until one found us.

You see, we didn’t actually set out to pay off a bunch of debt.

No, we were in the process of making a bunch of plans to fix things around the house, go on vacation, and hoping to do some “dream big” stuff with our kids.

But when we looked at our budget, we realized that none of that was really possible.

Because our credit card payments were eating all that money we wanted to spend on more fun things.

Yikes!

So my husband crossed everything off our list of fun. Instead, he wrote across the top of the paper… #yearofno.

And our motto was born.

It got us through some really tough times!

And it meant we didn’t have to justify things or explain anything. #Yearofno became a complete sentence.

What Did Our #YearofNo Look Like?

Don’t confuse the #yearofno with a spending freeze. 

You might get through a spending freeze for a week or even a month (by the skin of your teeth).

But most people just hold their breath through the freeze and buy the things they wanted once the freeze is over. 

That does nothing but delay spending.

Instead, #yearofno makes lasting changes.  It’s all about knowing the difference between need and want.

Our family refused to buy any extras at all for an entire year. 

That meant no book fairs, no fast food, no drinks from the concession stand, no replacement furniture, nothing. 

We forced ourselves to use it up, wear it out, make it do, or do without.

A #yearofno will retrain your brain.  It’s as easy as this: the answer to any spending starts with a strong no.  To actually spend the money, you’ll have to convince yourself that there is no other way around it.

1. Do we absolutely need this for good health and well being?  (Food, shelter, necessary clothing)
2. Will putting off this purchase mean we’ll spend more than double or triple the cost in the long run?  (Home and car repairs and maintenance)
3. Is this a once in a lifetime opportunity… that I can pay cash for?  (Like that fifth grade only special field trip or a First Communion.)

And here’s a helpful clue: If you have to speak more than one simple sentence to justify a purchase to yourself, you don’t need it.

Rule #5: Work for It

If you’ve already been living this way and you still have no money to pay off debt, you’ll need to get a second job. 

The good news about taking on extra work is that you’ll have even less time for spending money!

If you have internet access at home, you can try things like transcription and evaluating search engines.  If not, then consider starting your own house cleaning business. 

Or get a job as a cashier at a local business.  You might even try passing out samples on the weekend.

Rule #6: Beat The Clock

(Maybe this one isn’t so much a rule, but it makes it more fun.)

This one is perfect for people who get excited when they beat the time Waze gave them to get to a destination.

Anxious to get out of debt faster?  Sell everything you own that isn’t essential to living a good, healthy life.

If your car payment is too high, then save up (#yearofno) or work side jobs until you can pay the difference between what it’s worth and what you owe.

THEN…sell the car and buy a more reasonable vehicle.

Want to earn some extra money to pay it off even faster?  Think of dirty jobs that others don’t want to do. 

Mike Rowe’s advice is spot on, whether you’re looking for work that pays better or just want to get a raise or promotion doing what you already love.

Remember that if you’ve been “charging it” for years, there’s no magic bullet for getting out of debt quickly.  But if you start today, you’ll be finished that much sooner.

One Last Thing

Pulling together an emergency fund when you should be paying every extra dollar on debt feels counterproductive.  But here’s why it isn’t.

At the same time you’re paying off debt, you need to teach yourself how to live without credit cards. 

Your car doesn’t care that you’re paying off debt.  It’s going to break down anyway. 

Your washer doesn’t care about your goals.  It’s going to fritz out when you least expect it.

Having a small emergency fund will teach you how to rely on yourself when you need to buy something unexpected. 

You’ll need the confidence boost you’ll get from saying things like, “Hey!  I paid for that repair myself!”

Use my 52 week money challenge to help you pull together $1,000.  But instead of taking 52 weeks, challenge yourself to find those bits of money in the shortest time period possible. 

Then you can start your debt payments ASAP.

That’s How To Get Out of Debt!

Getting yourself out of debt is important, so don’t let someone else do it for you.  Not only will you get the benefit of fewer bills, but you’ll also give yourself a PhD in Money Management.  That will serve you for a lifetime.

Need a little boost to get you started?  Join the 30 Day Challenge!

Have you successfully paid off debt?  How did you do it?