Debt Freedom: Where Do I Start?
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If you want to change your financial future but have no idea where to start, you’ve come to the right place. I’ve been there. Nearly four years ago, living paycheck to paycheck, barely able to pay my bills and still eat, I decided that I didn’t want to live that way anymore.
I made a choice, and you can do it too. It takes a split second, but it changes everything. Decide right now that you’re going to give this your all. Try it for six months, and I promise your life will be forever changed. With that, let’s jump into it!
How do I get started?
The most common question I get when people find my Instagram account is how do I get started? I love getting this question because it means they are interested in becoming debt free and are taking the first step to making it happen, so I compiled my answers into this post.
Stop Borrowing Money
Yes, this is indeed the first step to becoming debt free. You’re not going to make any progress building financial stability when you’re digging a hole at the other end! You have to draw a line in the sand and say this. Is. It. We’re not borrowing money anymore.
Determine how much debt you have
Adding up your debt can be a scary step, especially if you’ve been avoiding the numbers, but grab a glass of wine or a beer and sit down to write all of your debts down from smallest balance to largest balance. You can use my Excel Debt Snowball Template to organize your debts. You need to know how big your problem is before you can start to tackle it.
If you don’t know what debt you have, you can look at your credit report. Federal law allows you to get a free copy of your credit report every 12 months from each credit reporting company. Credit Karma also does a fantastic job of showing your debts, and it’s free – just make sure to ignore the credit card offers (they’re sneaky like that). For student loans, you can look at the National Student Loan Database.
My YouTube video Zero Based Budget Tour goes into more detail about what a zero based budget is and how we do ours in Excel. The video is a little long, but it’s useful information!
Dave Ramsey also has some great paper budgeting forms along with the Every Dollar app that has a lot of categories to remind you what you need to put in your budget.
Read The Total Money Makeover or attend Financial Peace University (FPU)
You can rent the book from your local library or purchase the book on Amazon. The Total Money Makeover is a book that you will want to own to reference back to it.
Financial Peace University is a nine-week class. Each week there is a video lesson by Dave Ramsey, small group discussions, and homework from the lesson. It’s a very interactive class that keeps you accountable.
If you have the cash, I highly recommend going through the course. It may seem a bit pricey, but once you have the kit, you can go through the class as many times as you want. I’ve been through it three times!
Follow like-minded people
Check out the hashtag #debtfreecommunity on Instagram for others doing the exact same thing. People from all over the world with different lifestyles, scenarios, and starting points are becoming debt free. You can do this!
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About Amanda Williams