Wednesday, April 16, 2014

Paying off Debt (Part One)...How I Did It

Since April is Financial Literacy Month I decided to make my "return" to blogging focus on finances this month. After the end of the marriage I was left with all of the collected debt. I guess someone usually ends up with the debt, right? Lucky me. It was the price I was willing to pay to get out peacefully. My credit was the better of the two so most of what we had was in my name. Once again....lucky me.

I am the average "working middle class" woman in America and am not claiming to be a financial planner. What I did was pay off all of the marriage debt, credit cards, overdue accounts, etc. in five years without receiving a pay raise in three of those years. The first thing I did was to pull everything together and realize the amount of debt I was facing. Luckily, I have always been frugal. You know, what some people call cheap.

Step One: Get a budget (and know how much money you make)

Ah, that word budget. It might be uglier than cheap, right? It is a must. You must know what you spend and you must know where you spend it. My first response to a budget was, "But, I don't have any money!" You will be shocked at how fast a dollar here and three dollars there adds up. How much have you spent in fast food, a cup of coffee and the vending machine today?

You can find a few budget guidelines online for free. This book is a great resource. I have listened to the author for years on the radio during my lunch break. He is the reason I bought my house and got out of debt. I will forever be grateful for finding his radio show. He shows you how to manage your money without changing your lifestyle. That was a big plus for me because I didn't have much left to cut back. If you have the chance to attend one of his seminars, do yourself a BIG favor and go! Most of them are free.

I added know how much money you make for a reason. You may say, "Who does not know how much they make?" I said the same until I went to a building wealth seminar and the question was asked. Only three people out of around 100 knew how much was in their paycheck. can you manage something when you have no idea how much you have to work with?

Step Two: Track Your Budget

What good is the best budget if you ignore it? Don't have the time? Well, you have a phone. Chances are it is a smart phone that you have with you all the time, right? Guess what? There's an app for that. I use the free version of this one. There are many apps that track your expenses and there is a good write up on a few of them here. There are always new apps available but bottom line is find one and use it. It takes about the same amount of time to make an entry in the app as it does to send a text. My main focus is four areas of my budget, food, gas, utilities and pet supplies. Those are my four areas that fluctuate so I try to keep a close eye on them. I use sub-groups to cheat the app a little because you can only track four "budgeting areas" in the free version of the app I use.

At the end of the year you can save a copy of your data and export it into excel to organize/manipulate it to see what you spend and where you spent it compared to your budget.

That is the beginning. A good first step. I have a few other things I have used over the years. More to come...

Until Next Time,

Peace & Blessings...


  1. You already know my eyes lit up when I saw this post. I love a good a finance post about budgeting and getting out of debt.

  2. “…pull everything together and realize the amount of debt I was facing.” - That is a good start. Being in debt can be a real pain in the neck. If you don’t plan your finances ahead of time, it'll be harder to take care of in the future. It’s a good thing that you found a good book for inspiration and an application that help you track all your expenses. At least the stress you might feel in dealing with your debt is lessened somehow. Also, it will be of great help if you know someone or an expert who can give you advice on your current state.

    Charlena Leonard @ WeidnerLaw

    1. Charlena, this was written as an overview series of posts of how I got out of debt. My debt (as I included in the above post) was a result of inheriting all of the marriage debt from a divorce. There is no amount of planning that prepares for that.

      I no longer have credit card debt because of the things I am including in my posts. I did have someone (listed in my part II of this series) who helped with my budget and guided me to reach the first of my financial goals. I included the link to his web site on the second post and also a link to the seminars he hosts around town. You can have all the expert help in the world but until you get the discipline and understanding needed, you will end up back where you debt.