Get rid of debt

Financial hardship

We have learned some great ways to help us stretch a dollar further. But what if we already accrued debt and are struggling monthly to pay the minimum payment?

Debt is a burden; you must learn to get free from debt to enjoy life.

Itemized bill statement

We need first to know our bills. Having it written down will allow you to see where your money goes each month and for how long. So let's make two lists: the fixed list (the bills we can't adjust or get rid of) and the adjustable list (the ones we can eventually get rid of). House payment is fixed. We need a home and these are the expenses in this home.

Example: Fixed

Bill monthly payment

House $1000.00

Electric $250.00

Water $50.00

Trash $30.00

Gas- house $80.00

Total $1410

Example: Adjustable

Bill min amount total owe

*Cable $300.00 <

*Cell phone $150.00

*Medical ins. $400.00

*Car ins $150.00

Loans $300.00 $5000.00

Credit card $50.00 $3000.00

Total $1350

*Means we can adjust or get rid of them. Insurance is necessary, but you can shop for better rates or adjust your rate.

Now we have a visual of our expenses.

Let's now include our needs.

Living Expense

Groceries $400.00

Gas $150.00

Daycare $400.00

Total $950.00

These needs can be adjusted but are necessary for our day-to-day living expenses.

Wants:

Entertainment money $200.00

Clothing expenses $50.00

Coffee $140.00 <

Netflix $20.00

Total $410.00

Last thing we must add

Last month's income was $3500.00

We are $620.00 over. We will need to adjust - either get cheaper rates or get rid of that expense til we can afford it.

< means we got rid of that bill for now, saving us $440. We are still $180.00 over time to think of a 2nd job or maybe donating plasma to help

Create a weekly or biweekly budget depending on your pay periods

1st paycheck $1750.00 Doordash $200,00 for 2 weeks

List bills you need to pay with that. Don't forget your living expenses

2nd paycheck $1750.00 Doordash $200.00 for 2 weeks

By doing Doordash, we are now $220 ahead.

Now that we have extra money, we can eliminate some bills.

Debt Snowball

Let's look at our adjustable expenses.

We have 2 bills we need to get rid of

Credit card $50 $3000

Loan $300 $5000

Always start with our smallest monthly payment. In this case, it's the Credit card.

Next time we will pay $270.00 - original payment $50 + $220 from Doordash

Continue doing this each month with any extra money til the Credit card payment is paid off

Then work on the loan.

Pay $350 (original payment + the money used when paying the credit card) + any extra money from Doordash.

Continue doing this till your loan is paid off.

I hope this helps. Leave a comment. Let me know if this helped or if you have some questions.