Study.Work.Travel.

8 months ago, I was drowning in $26,000 of debt with collections, car loan, and a credit card I didn’t need. Today, I am completely debt-free – and I’ve also saved $9,000. It doesn’t feel real, but its real. Here’s how I did it, and how you can too…

My financial reality was that I was making a decent salary from a recent promotion with no savings and a mountain of debt I was facing every month. As a single mother I was always feeling stressed, trapped, and ready for change. I knew I had to make drastic changes because paying minimum payments was getting me nowhere.

I will honestly admit I could not achieve these milestones with some serious help and resources. My game plan originated from the Dave Ramsey Baby Steps program. I made sure that I followed and completed each step before I skipped to the next one. I started with Baby Step 1 – $1000 emergency savings while catching up on all my current bills. I slimmed down my budget so that we were living on basic necessities to aggressively pay down debt.

Getting to the point of being able to pay off debt took some serious slashing of expenses. I tracked all of my spending throughout the month and made major changes including cancelling all the subscriptions I didn’t use, cooking more at home throughout the week, and limited shopping and dining out. I created the habit of using all of what I need and only replacing things that are completely used and/or beyond repair. Doing this I found almost $2000 in my budget a month that I can use toward all my debt.

When I was on Baby Step 2 I was ready to start taking serious action with my debt. I followed the Snowball method listing all my debt from lowest to highest and putting all my extra money into closing accounts to $0 balances. Paying off debt was at the top of my budget. When I received bonuses or any extra income it went all towards debt. Once I got to my largest debt – my car loan, I was so determined to get rid of it as soon as possible. I paid off my car in 4 months and became officially debt free!!!!

Once I paid off my car I went straight to Baby Step 3 – Saving 3-6 months expenses for emergency savings. I am currently in this savings plan automating all my savings and beginning my Baby Step 4 – Retirement Investment. I was able to save over $9000 in 3 months and have successfully automated all my savings and investments so that I can focus on my next goals – which include international travel and purchasing a home Cash!

Here are some mindset shifts and lessons I learned if you are trying to get out of debt and create financial security for yourself and your family:

-Focus on Progress, Not Perfection

-Visualize Freedom – See the $0 debt

-Avoid Lifestyle Creep – keep spending minimal despite extra cash

-Know exactly what you owe and plan

-Open Separate Savings Account

-Automate Savings – Prevents mindless spending and builds confidence

-Track every dollar