She Strengthens

Taking Control of Your Finances: A Personal Journey

As tax season approaches, many of us take a closer look at our financial situation. While it’s ideal to be in a stable and positive financial position, the reality is that many households struggle with debt. In fact, the average U.S. household carries over $15,000 in credit card debt and nearly $130,000 in total debt.

My Story: Falling into Debt and Finding a Way Out

I’ve been in those shoes twice, and I’ve learned firsthand how debt can quickly spiral out of control. My first experience with debt was after college, when I was living in an apartment I couldn’t afford and then got into a car accident. I maxed out my credit cards and ended up with $24,000 in debt. My second experience was similar, with limited financial flexibility and misguided expectations. I was in a serious relationship where I was the sole provider, and I put everything on credit to provide for myself and my partner. By the end of the relationship, I was $15,000 in debt.

The Consequences of Debt

Debt can be overwhelming and force you to live paycheck-to-paycheck, with little room for error or unexpected expenses. It’s essential to be mindful of your spending habits and prioritize saving to avoid falling into debt.

Four Strategies for Paying Off Debt and Maintaining a Debt-Free Life

Through my experiences, I’ve developed a methodical approach to paying off debt and maintaining a debt-free life. Here are four strategies that worked for me:

Track Your Spending

Paying off debt is impossible if you don’t know where your money is going. Tracking your spending helps you identify areas where you can cut back and prioritize debt repayment. I use a paper planner and spreadsheet to track my expenses and evaluate trends in my spending.

Create a Budget That Works for You

Once you start tracking your spending, create a budget that fits your needs. Compare your income and expenses, and make adjustments as needed. Be proactive about trimming back unnecessary expenses, and build in a buffer for unexpected costs.

Snowball Your Debt

When dealing with multiple debts, it can be challenging to know where to start. I found that snowballing my debt – paying off the smallest debt first – was the most effective way to make progress. This approach helped me stay motivated and see real change over time.

Earn Extra Cash

After analyzing your income and expenses, you may need to find additional sources of income to accelerate debt repayment. I sold unwanted items, moonlighted in my industry, and started doing freelance voiceover work to bring in extra cash.

Maintaining a Debt-Free Life

Paying off debt requires hard work, discipline, and planning. By being mindful of your spending habits, tracking your expenses, and prioritizing debt repayment, you can take control of your finances and maintain a debt-free life. Remember to stay vigilant and continue practicing these habits even after you’ve paid off your debt.