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You Can Get Rid Of Debt Series - Part 2

Updated on December 6, 2014

Get Motivated About Getting rid of Debt

Welcome back to "You Can Get Rid of Debt Series - Part 2". I hope that you're just as motivated if not more than I am about the reality of becoming debt free in the future. If you're still feeling down in the dumps about debt - start practicing some self therapy by telling yourself over and over everyday that one day you will be debt free, that you will be a better manager of your money and that you will begin to save money so you can live the life you always wanted to. There is so much I'm going to teach in these series - I feel like I am going to burst out my seams because I'm so excited. Everything I'm writing about is something that I am currently doing which is working well for me - and so I want to share it with you.

Get motivated about becoming debt free.
Get motivated about becoming debt free. | Source

Last Weeks Assignment

Last week's assignment was to find all of your bills around your home and to compile them in one place arranging them in order from highest to lowest balance or highest to lowest interest rates. Having all of your bills in one place is a step towards getting them organized and ready for the task of paying them off. Like I said in the first part, you don't have to have to buy an expensive bill organizer when an ordinary shoe box will do which will be burned when your bills are paid.

Paying off Debt Gives you a Sense of Control

Living in debt makes you feel like you don't have control over your life and finances. As you begin to take steps towards paying off your debt, that feeling of vulnerability will leave and you will begin to feel confident. According to David Ramsey, getting control of your money is 80% behavior and 20% head knowledge - math (Dave Ramsey's Total Money Makeover). Like I stressed in Part 1, you have to change your mindset about money, how you think about it which will affect how you spend it.

Declare that you are going to be debt free.
Declare that you are going to be debt free. | Source

Cut up Your Credit Cards

Schedule some time to cut up your credit cards - but don't close the accounts. Closing accounts negatively affects your credit. When I cut up my credit cards, I made sure to cut them in as many little pieces as I could. It gave me such a sense of relief because I knew that it was the mark of a new financial start. Cutting up your cards also gives you a sense of freedom. Do a happy dance afterwards, even better have a little celebration about fact that you are not going to be a slave to debt anymore. After you've cut them up, make sure you don't call for new ones. This is a test of discipline and change. You can do it and you can live without your credit cards.

Cut those credit cards up in tiny little pieces.
Cut those credit cards up in tiny little pieces. | Source

Talk to Your Creditors

This week's assignment is to call and talk to all of your creditors. This is an important step to becoming debt free. Do not be afraid to let them know your situation and that you have every intent of paying your bills off. They will actually respect and work with you to help you achieve your goal. Ask them if the interest rate or if your payment could be lowered temporarily. Also ask if your payment date could be changed to one that will be more convenient for you to avoid late fees. Many creditors have hardship programs which customers do not know about because they don't ask. Keep the lines of communication open with your creditors as you pay off your debt and always let them know of any changes in your situation.

Start Paying off Those Bills

In the last hub I suggested that you make a list of your bills in a Word Document or Excel which you compiled, from lowest to highest balance or from lowest to highest interest rate. It's ultimately up to you if you want to tackle the bills with the lowest balance first or the bill with the highest interest rate first, everyone has their preference and reasoning. To get stated, I suggest you start attacking the bill with the lowest balance first because this will give you a sense of accomplishment when it's paid off. I personally like Dave Ramsey's snowball effect of paying off debt. Pay the minimum amounts on all of your accounts but put more money towards the first one you are paying off. Send any extra money towards that account whenever you can, even if it is just $10.00 because $10.00 here and there adds up. When you pay off that bill, put the same amount you paid towards that bill to the next one together with the minimum payment. This is known as the snowball effect which Dave Ramsey suggests to do (Dave Ramsey's Total Money Make Over). Dave Ramsey recommends to save a minimum of $1000 in an emergency fund before starting, some people may or may not be able to do this. Whether you choose to save the $1000 first is totally up to you, just get started paying off your bills using this technique.

Dave Ramsey's Debt Snowball Effect - Courtesy Dave Ramsey Youtube

Money Saving Tip

In this and subsequent hubs, I'll start giving you some money saving advice to go along with your new lifestyle. Since you are on your way to becoming debt free a great way to start saving lots of money is learning to buy second hand. I'm sure some of you are saying "no way." I say don't knock it until you try it. I have been shopping at the Goodwill, Catholic Charities and the Salvation Army lately and can honestly say that I've found many wonderful items - especially name brand clothes. I constantly get compliments on my clothes - you don't have to tell people where you bought the clothes - although you can if you want to. Many well-to-do people donate clothing before they are even worn, I have actually bought clothing from these place with tags still on. Another great thing about shopping at a thrift store is that proceeds help people in need. 100% of catholic charities proceeds go towards feeding the hungry in the state of Maine.


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    • creativelycc profile image

      Carrie L. Cronkite 2 years ago from Maine

      Hi Dr. Penny Pincher,

      That is awesome and I bet they are good quality pieces of furniture. Way to go! Thank you so much for your comments. I love buying second hand furniture and clothes!

    • drpennypincher profile image

      Dr Penny Pincher 2 years ago from Iowa, USA

      Buying second-hand item instead of new items is a great tip to spend less money. I got a very nice chair and ottoman at a consignment shop for $38 that I have been enjoying for a few years now. Looking forward to reading part 3 now...

    • creativelycc profile image

      Carrie L. Cronkite 2 years ago from Maine

      Thank you so much Victoria for your comment and I'm happy to hear that you've been doing these things for years. It's good to have a credit card as long as you pay it off monthly like you said. I can't wait to get where you are - with only a mortgage left!!! It's going to happen!!!

    • Victoria Lynn profile image

      Victoria Lynn 2 years ago from Arkansas, USA

      I've been doing these things for years ( I rarely buy anything new!) except that I do have a credit card that I use for certain things since I hate writing checks or using debit cards. I pay it off every month, though. All I have is some of my mortgage left, but I'm thinking about downsizing and having no mortgage! Exciting stuff! Good hub!

    • creativelycc profile image

      Carrie L. Cronkite 2 years ago from Maine

      Thank you very much for your comment, I hope to help many!

    • DDE profile image

      Devika Primić 2 years ago from Dubrovnik, Croatia

      Debt is a problem for many and your ideas sounds most helpful.