Ok, so you’ve been thinking about jumping on the “no debt” bandwagon, buuutttt aren’t trying to become a coupon-clipping mogul in the name of financial freedom. Ain’t nobody got time for that! #BYEFELICIA
Seriously, frugal living and penny pinching are not for me either! I work too dang hard to eat rice and beans for dinner every night. Am I right or am I right?
But I’ve been there too, staring at a mountain of debt…to the tune of $730k+, that’s almost three quarters of a million dollars in debt!!! *Side note: WTF were we thinking, yes you read that number right*. But no worries, I got you! There are other ways to pimp slap your debt BUH BYE!
Not too long ago, the Mista’ and I were being crushed by our debt. We could “afford” the payments. BUT we couldn’t plan for our future because Mr. Debt had his hands ALL up in our pockets. We also knew paying down our debt would be key if we ever had some crazy life ish happen. You know old Murphy and his law…crap happens and when it rains it pours!
We started looking for ways to blast through our debt hella quick. Here are the 5 key things we used to pay down $700k of that mountain real quick!
1. USE SAVINGS – Yes, I said it…there is no point in having your money sit in a savings account! It sits there earning peanuts while your debt racks up interest faster than the speed of light! We took all BUT $1,000 of our hard earned savings and applied it towards our debt.
But what about potential emergencies?
That’s what the $1,000 is for! And if something popped up for more than the $1,000, we were confident we could pull money from other areas of our spending plan. Hey…it’s better than the alternative of taking on more debt to eliminate the emergency! #screwmurphyslaw BOOM.
2. BORROW AGAINST RETIREMENT ACCOUNTS – drastic times call for drastic measures! Yes!!! Use what you have available to you and make those retirement funds work for you NOW! The lovely thing about borrowing against your 401k is that you ARE the bank….so guess who gets allllll that piled up interest? YOU, sounds like a win-win to me. ☺
With the money we’re saving every month we can rebuild it from 0 to 100 ASAP! Whoop whoop!
3. TAKE AN EQUITY LINE OF CREDIT – If you own your home, using the equity to pay down your debt is a great option too. I know it seems like robbing Peter to pay Paul, but think of it this way… Peter (consuer debt) charges a million percent interest on the debt, while Paul (mortgage debt) charges peanuts in interest every month.
…I’d rather pay Paul. #sorrynotsorry
We took advantage of this method because 1) we knew that we would pay far less interest, and 2) we had bigger plans in the works! Wait until you see strategy #5 below…yep we did that.
4. SELL YOUR FANCY SCHMANCY CAR (or whatever completely unnecessary “luxury item” taking up space/money)– I don’t know how many cars you have, but we had 3. One of them we lovingly named Sunday, because she was a luxury vehicle that we drove only on Sundays…ummmm wowza.
What a DUMB idea, to have a 4 digit car payment (hey I said it was dumb, don’t judge me lol) on a car that gets driven 4-5 times A MONTH!!!
To be honest, I know it’s hard not to live how you want when you know you can afford to buy what you want. We spend our time accumulating ALL.THE.THINGS. because we feel like we work hard and deserve it, because we CAN. Buying the latest this or the newest that. But in the end, all of the new gadgets and fun toys cost us our peace of mind and steal from our financial future. Your future self is throwing mad shade your way right now!
While you definitely don’t have to stop enjoying the fruits of your labor, you don’t have to continue shopping and buying because society tells you that’s what you do when you make plenty of money. You don’t look successful, but more like a hoarder.
Obviously, I have been guilty of buywhatiwanna syndrome too so NO judgment here! Selling our “Sunday” car was a no brainer. We lowered our debt and were able to put that freed up money to good use elsewhere. Bonus perk, now we get to enjoy our remaining two vehicles and not feel guilty about the ridiculous payment sitting in the garage haha!
5. SELL YOUR HOME – Yes girl yeeeessss!!! One of our most effective strategies was to sell our home. Go find a smaller home and fancy it up with all of your favorite bling and such. I promise you, you won’t miss all that cleaning or the jumbo mortgage that came with it.
Sacrificing our lifestyle was a deal breaker, but we were serious about putting ourselves in a better financial position. So we sold the home that we had just completed a one year massive renovation on!
We took every last penny of the money from the sale and crushed as much debt as we could! #notoneregret
Remember those equity lines of credit we had, well those were paid off from the sale of the house…it was like waving my magic wand and shouting EVANESCO (spell for vanishing something)!!! Sorry, my Harry Potter obsesh is hanging out hehe.
Wondering where we moved?…right across the street into one of our newly renovated investment properties! Total win in my book. #househack We found it so refreshing to be in a smaller space…free rent AND less to clean?!? SCORE! ☺
In the midst of us enjoying our hard earned money, we need to stop and take a hard look at the amount of money we commit to debt.
Because fa reals…
Jobs are not guaranteed, industries dry up, companies go out of business, medical emergencies crop up, cars get totaled, and all other manner of shizz can and WILL happen. And when it does…look out for old Murphy!
Will you be able to weather the storm and come out of the other side in tact? Would it leave you reeling in a precarious situation and DEEPER in debt?
If your answer is yes, then its time to take ACTION!
Deciding to be debt free does NOT mean you have to become a frugalista and resort to penny pinching. But you DO have to make an intentional decision and be willing to get creative to slay that debt. Your future self will thank you!!!