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Hopefully, this post will help you with this topic. Now, let me tell you, I am not a financial expert in any way, shape, or form. However, I had raised two kids as a single parent before I met my wonderful husband. I have learned over many years, given I am up in my age, so I have many years of life experience that I will share with you.

One major thing I learned in taking Dave Ramsey Financial Class is that I didn’t make enough money to live a comfortable life and have debt at the same time. So, one of the first things I have done is to pay down as much of my debt as possible to free up some of my money so that I have more each month.

How did I do that, you ask?

Well, it will be one of the hardest things to do if you are short on money. But, it can be done. You will just have to stick to your plan.

The best way to do this is to sit down, make a budget figure out how much money you have left after your bills, to keep a roof over your head, utilities, transportation, and food. Then look at the remaining bills. Make a list from largest to smallest. Decide how much you want to allocate to each account. Don’t fear if you don’t have a lot and can only pay five dollars a month or bi-monthly. I would do this with your more significant balances. It’s ok, write to your creditor let them know what you have planned. They want their money, most will work with you.  

Now, start with the lowest bill. You have to see if you can pay it off all at once; if not, take a good portion of your money to apply it to this bill. However, make sure you pay something to each account. Make sure you at least send something like five dollars.

Once you have the lowest bill paid off, take that payment and apply it to the next lowest amount bill until it is paid off.

I know you think I’m going to say take that money roll it over to the next bill. Well, that is only half right. Actually, what I want you to do is divide it in half. Apply one half to the next bill. Then take the other half put it into your savings account.

Why do this, you ask?

Well, you are trying to pay down your debt. One thing that leads us into debt is not having money set aside to take care of emergencies or other daily life activities as they arrive. Doing this gives you money to use other than your credit card with a high interest rate.

Speaking of credit cards, you will have to pay over the minimum balance when paying your monthly bill to get them paid off, for you will be paying nothing but interest. You need to bring down the actual bill amount to lower the interest payment. This can be hard to do, but it can be down.

The whole process will depend on how much debt you have, as well as how committed you are to staying on track with your budget. If you keep the course to follow through on your commitment, you will be much financially more stable.

You have all your debt paid down. Now, you want to go on a shopping spree with the extra money you have.

Don’t Be Tempted.

Wrong, don’t be tempted to do this. Make you a list of the things you need and the things you want. Budget for them each month. While you put away the money, you have saved from paying off your bills in the savings account.

If you start spending right away, you will fall back into this habit only to create more debt for yourself. You must learn to break the cycle, which can be extremely hard. I mean, come on in this day in age, we are taught to spend money.

Go over your lists of needs; think long before you decide to make a purchase. Do I really need this item? How does it benefit me?

Then go over your wants list. Is this something I really want? If so, why? What is so important about it is that I like it. Is it to outdo my neighbor, or is it beneficial in some way?

When we stop to think about why we are spending our hard earn money. It keeps from doing compulsive buying. It allows you to be aware of what you truly need or want. In the long run, it will enable you to keep your money where it should be so that when the time arises, you have what you will need to make a wise decision. As well as the money to make an intelligent investment. Where it be a home, a vehicle, or a retirement fund.

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