5 Steps for Starting Your Debt Free Journey

This is a list of the most important steps we took in starting our journey, and the reason we are carrying $48,000 less debt now than we were 6 months ago. Our journey is far from over but we will continue to look back on these steps to remember where we started. Anyone can make small changes that make a big impact in the end. Even if your goal isn’t to pay off all your debt as soon as possible, you might benefit from following these steps to kick-start your journey to financial freedom. Just remember, it’s a marathon, not a sprint (& I am definitely a sprinter).

Step 1: Write It All DownDebts

As I mentioned in my last post, the very first thing we did to start this journey was to write down all of our debts. I used an excel spreadsheet because I’m a business analyst and that’s what we do, but you can use a notebook, a sticky note, your phone- whatever works best for you. When I was done, my list looked sort of like this,  except I detailed what each debt item was. I didn’t include that in this post because to be honest, that’s a bit more than I’d like to share. As you can see, it really puts the debts into perspective.

Step 2: Track Your Spending

Before you can really begin throwing money at debt, you need to know where your money is going. I created a budget (again, in excel) that forced me to write out every expense I had in a month. I always watched my grandma log all of her expenses as a kid so she could balance her checkbook, and never understood why she continued to do it when she has online banking, but now I do! That $3 iced coffee and $10 Walmart run for the latest halotop and cereal (#reasonsIdonthaveabs) add up, and you hardly notice at all. Tracking your spending is crucial to the next step which is…

Step 3: Write a Budget

Get honest with yourself! What can you really go without? Every penny that isn’t spent by the end of the month is going towards debt, and that is exciting. By first tracking my spending, I was able to see what an average month looked like, where my money was going, and how much crap I could cut out to reach my goals. I now list out all of my monthly expenses, how much they’re going to be, and can get an honest view on how much leftover I’ll have by the end of the month. Since I want that number to be as high as possible, I can convince myself to avoid spending on little things because then I have to enter that line item expense and watch my debt payment tick away.

Step 4: Sell Stuff!

Two of our biggest debt items leftover from the farm were a skid-loader and a tractor. We sold the skid-loader and paid off the loan. Poof! Debt gone. The tractor was a little different story. It broke shortly after we bought it and the man we purchased it from refused to help make us whole. We financed the tractor, used it for less than 2 weeks, then sat on the loan for months hoping to find a solution. A solution never came and we wanted it gone. We ended up paying nearly $4,000 to make it go away- an expense we never expected to incur. But just like that, another line item gone. If you aren’t sitting on equipment loans (most people aren’t), I still recommend selling stuff! Old clothes, furniture, electronics & other crap laying around your house? List it on Facebook or have a garage sale. It can be hard to part with something you might have used debt to buy, but if it doesn’t bring you joy, you don’t need it and it can become a payment towards your debt which will bring you joy.

Step 5: Stay Focused

It can be really easy to get bogged down by the negative. “I’ll never pay this off,” or “that unexpected expense threw my whole month.” Your friends may be taking lavish vacations or buying new cars. You have got to stay focused on the goal: Financial Freedom. We had been using a couch that we purchased used on Craigslist for over 2 years. I reallllllly wanted a new one. In fact, I almost convinced myself we needed one, but I knew it wasn’t the right time so I waited. My waiting paid off because my dad moved and decided to switch out his gently used sectional for something smaller and gave it to me! I love it so much, and am so glad I stayed focused and waited. If you can’t pay cash, you can’t afford it.

That’s all for now, folks. Kickstart your journey to financial freedom and let me know how its going for you! I would love to hear about what has helped you along.

annie (1)


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