A lovely {and practical} how to..

Posted by Casey // dreams and bones. on Thursday, November 10, 2011. Filed under: , , , ,

When I'm reading my favorite blogs, I look for three things:

1. Crafty tutorials
2. Recipes + step by step instructions on how to cook {because let's face it, my famous cheese quesadillas are only going to get me so far when I become a wife..}
3. Useful how to's.

One of my favorite useful how to's that I recently stumbled upon this inspirational how to via Leigh-Ann at Freckled Nest, aptly called "Pay Off Debt."

Leigh-Ann's tips:

1. My first step for me was to stop spending so the debt quit growing! No more instinct shopping, only planned & needed purchases. 
Quit depending on others to bail you out.  
In January, I got obsessed with paying off my debt like it was a game... all I wanted to do was see those numbers go down!
4. Set yourself a reward.5. Make a list and prioritize! I wrote down all my debts and the priority of each. I paid off my debt to my Dad first, then the priority of all others was based on highest interest first (not highest or lowest amounts). Breaking the total down into steps/portions makes it feel so much less daunting and totally attainable.
Pay all your regular bills monthly.  
7. Once you've paid it off, close the credit card accounts except for one major credit card and always use cash that you actually have... Close them 3-5 months apart, but cut the cards up in the mean time.

Having been in a very similar situation to LA in the past, I have to agree! Once you stop spending, you simply have to stop allowing others to help you out. LA put it best when she said "it is like enabling an addiction," a very dangerous addiction in today's economic climate. When I was facing scary very high interest (24%, gulp!) credit card debt, I became afraid to open the bills when they arrived. Even though I wasn't spending, my debt accumulated monthly at an astronomical rate. 

So here's what I'd like to add to LA's tips:

1. Because I was a full-time student with a very limited income at the time, I called my credit card company and asked them to work with me. I explained that the monthly amount they wanted from me was more than half of my income, and inquired if they could shut down the account and lower my interest if I agreed to make automatic monthly payments. This apparently was the key word, because my interest was lowered to 12%, and I was put on a one year pay off plan. I can't tell you how excited I became those last three months, and I paid extra each time just to get rid of the debt! So my biggest piece of advice is, be humble, and just ask. If you really seek to pay your debt, often the companies will work with you!

2. Stop making impulse purchases! Put the bag down and back OUT of the store. I know it feels good to purchase something that will make you feel better about yourself. After all, you've been working so hard .. you deserve it right? If you are barely making ends meet, or facing a mounting pile of debt, that temporary feelgood moment is just that... temporary. It will go away, sometimes as soon as you look at the numbers. For me {and many of my friends!} it was quickly replaced by a big knot in my stomach. I love this thought from a Yahoo! article: "Commercials exist to convince you that material possessions are somehow related to happiness. This is a lie. Material possessions won't boost your ego — they'll steal your ability to become financially free."

Since I learned to stop making impulse purchases {believe me, it takes a lot of prayer and willpower not to hop off the bus and into a Forever 21 every week!}, I have found much more value in the very few purchases I do make. The $15 dress I bought a few weeks ago has since become my favorite.

 photo courtesy of moonpie photography !

3. Find somebody who will be REAL with you, and hold you accountable. the Bear is a master penny-pincher for me, and I am a strong penny-pincher for him. We call, text or ask each other before making any purchases over $10. Crazy, right? But by holding each other accountable to our life goals, which includes paying for our wedding, paying my student loans, and moving to Texas, we can be very strict with each other. Which brings me to my next tip...

4. Set a goal {and some rules} for yourself! I never understood this concept for the first three years I lived in Chicago. I tried, and tried, and tried again. For some reason, I couldn't keep any money in my savings account. Until the day the Mr. put a ring on my finger. All of a sudden, my favorite thing to do is hoard money from my check and put it into my savings. You will be surprised how quickly the savings add up when you are working towards a goal. So what kind of rules should you set? Stop eating out multiple times a week {pack yourself a lunch! eat before your friends want to meet you at a restaurant!}, don't make impulse buys, and set aside x-amount of dollars from every paycheck. Even $10-20 can go a long way. What would happen if you saved for a few months to go on a shopping spree, instead of going when you have "extra money" next check?

What are your tips for saving? Have you gotten yourself out of debt- if so, how? Or are you currently struggling in debt? Try out these tips and stop back - let me know how it works for you!

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