Get Out of Debt | How to Begin a Debt Free Journey 2024

today we're going to be discussing how to begin on a debt free Journey for any of us beginning a debt-free journey can be extremely stressful and overwhelming it can be overwhelming to think about the amount of debt that you have it can be overwhelming to organize your money to actually take a look at your statements see where your money is going so I really wanted to break this down into around seven steps and I wanted to break those steps down into very doable categories and give you some time frames that you should allow yourself to have with each step so the first step I would give yourself at least a week to do that way if you're working if you have children if you got things going on in your life most of us do if you give yourself a good solid week you can get to a place where you're not so overwhelmed you're not so stressed you're giving yourself time to get through all of the things you need to get through and you're not overwhelming yourself in the process so the first step is to get clear about your money now you may be asking what does that even mean what does it mean to get clear about your money so getting clear about your money means outlining your money outlining exactly how much you're making how much debt you have how much you spend on categories like entertainment going out to eat clothing and gaining a very clear perspective your overall Financial picture so that's why this step alone can take at least a week it's truly depending on who you are and where you're at in your life so for some you may just have a car payment and rent maybe a credit card that would not take you very long to really organize and get a good outline picture of what that would look like however you may be a couple having four children two car payments a mortgage ballerina lessons we've got groceries you've got pets you have tons of different things and that's where I would give yourself at least a week to really organize get a good outline of where all your money is going and gather all that financial information into one place a couple of helpful tips on this is to go to each and every place that you're spending money go and get a statement from the last month even your bank statements this is going to be very helpful and understanding and outlining okay I'm spending XYZ on eating out I'm spending XYZ on subscriptions so going and getting that statement for the previous month from each and every place you're actually spending or using an account through is going to really help you break down that picture now once you have all of the statements all of your financial picture and order I do have a recommendation for checking out my website I'm going to have it linked in the comments down below I do have some budgeting outlines for a dollar on there they are digital PDFs they are reusable and you can feel free to check that out I'll leave it in the comments down below that's a helpful tool as well all right now after that all is completed the second step is going to be create a budget this step alone can also take a good solid week depending on who you are I wouldn't overwhelm yourself overwhelming yourself is going to kind of get you to back away from it especially psychologically if you're overwhelming yourself with these steps and trying to really cram them all in one two days that type of thing you may get freaked out so I do recommend taking your time on each one of these steps that way you can really get through it be confident where you're at not feel so stressed and not feel so overwhelmed so creating a budget I do have a video on this so I'm not going to get into my new detail here about how to create a budget I will leave a link for it in my description box I'll also place a card for it here and once you have all of those statements all of your ideas of where your money is going all of your debts then creating a budget becomes much easier now after you've done that you've watched the video or you've totally set up your budget step number three is going to be prioritizing your debt you can use a couple of different methods here I know Dave Ramsey does have a couple of great ways to actually tackle debt so he does offer the snowball method which is taking a look at your debt smallest to largest and making your minimum payment on all of your largest and then your smallest debt you're going to tackle first putting all extra money to your smallest debt no matter the interest rate you're just looking at the amount you owe you pay that off and then once that's paid off you're going to take your payment and your extra money that you are paying on that and you're going to go up to your second smallest debt and then your third and your fourth and your fifth till you get to your last one and that's called the snowball method I personal only think that is the easiest way to do it however you can also take a look at your interest rates on all of your debts and you can begin paying based off the highest interest rate so either way is fine but you are going to begin paying off those debts based on the snowball method or the highest interest rate method even though this is a debt payoff focused video it is important to also add in an emergency Savings in between tackling that debt and your budget so in between that sort of really going full force towards your debt and getting a clear picture on your budget adding in building an emergency savings is important because that way if an emergency arises you don't have to take on more debt to pay for that emergency alright the next thing I want to mention here is a debt consolidation loan this isn't necessarily a step because it truly depends on the type of financial situation that you're in however a debt consolidation loan is a great option if you have semi-good credit good payment history it's a great option to get all of your debt Consolidated into one payment and then it also will help to reduce those High interest credit card debts and to really consolidate it into one payment so that's an option I want to mention Sofi loans Sofi is who I use for absolutely everything checking saving investing I will leave a link for this in my description box for you to get some extra cash so if you're interested in consolidating that debt take a look at my link in the description box below to go ahead and sign up and earn an extra bonus for using my link okay we're moving right along the next step after you have all of your debts in order is to cut back on unnecessary expenses so after you've made your budget you've totally taken a look at where all your money is going you're going to probably be a little shocked at what you're spending your money on if you don't have a budget right now and you're not really aware of where all of your money is going every month when you really take a good hard look at it you're going to be a little shocked at how much you're spending on going out to eat subscriptions entertainment TV streaming networks all of that stu