When Ryan and I got real with our spending habits and bills that was when we finally were able to break the chains. We were able to start moving in the right direction even if that was a long and painful process. But lets be honest – a couple of entrepreneur kids don’t end up in $100,000 worth of debt over night.
Here are the top 12 things we implemented in our lives to pay off our debt, maintain our credit and purchase another home all within a 2 year time frame.
- WE PULLED OUR HEADS OUT OF YOU KNOW WHERE – yes that is right. We had to stop Ignoring the problem. We were never ever going to fix anything if we just continued to open bills when it suited us or just spent our days looking at the available credit on our visa. Ignoring your bills does not make them stop happening.
- WE ORGANIZED EVERYTHING – We took every bill we had and sorted it into groups. Focusing on our mandatory essential to living bills – such as mortgage, power, gas, insurance, car and food. Everything else became extra.
- WE ELIMINATED THE EXTRAS – ALL THE EXTRAS – Yes I know what is there to do when its winter and its minus 40 and hockey season has started, guess what hockey is never going to pay your bills and neither is sitting on your ass doing nothing about it nor is knowing who was evicted from the Big Brother House. The 80$ PPV UFC fights add up my friends. You need to get super real with the items that are burning holes in your cash flow. Realistically I could make a list a mile long but here is a good start.
- Cable Television
- Fancy Cell phones
- Brand Name Clothing
- Eating out
- Fancy meals
- Types of insurance – extras – PLEASE DO NOT eliminate your life insurance or health insurance but the extras like credit card insurance and things that are here and there that are totally unnecessary.
- Vacations/ Holiday Gifts / Travelling
- Subscriptions – magazines
- Going over on cell phone usage for data or long distance.
- Fancy hair salon visits
- Gel Nails
- WE NEVER MISSED A MINIMUM PAYMENT – although we never want to be stuck in this habit – at the very least you can never miss a minimum payment this will go ALONG way with your credit.
- CREDIT CARDS – A biggie – having massive credit card debt BLOWS but not having access to credit is even worse. So we never cut up our cards because we knew when you NEED credit you can’t get it. So instead we called all our credit card companies and reduced our cards to the lowest interest rate and if we were able to do a transfer to a lower card we made that happen. This process is super simple and really not very time consuming at all. Example: Take your premium Aero Gold and drop that sucker down to a basic VISA – you will also reduce that insane 100$ annual fee they charge you to rack up points that you cant even afford to use.
- WE SOLD EVERYTHING – while this was not easy we spent years together acquiring things for our home, gifts, wardrobe but at the end of the day its just STUFF. One mans junk is another persons treasure. I promise you this is couldn’t be more true. Ryan and I ended using Kijiji (Canadian Craigslist type of deal-000) to sell almost anything we had. We simplified everything, reduced clutter and paid off massive bills. We also learned we had entirely too much excess and tons of things we were never using any-ways. Big ticket items included:
- Nintendo Wii
- Mac Desk Top
- Filing Cabinet
- WE SET UP MULTIPLE ACCOUNTS AT THE BANK: One of the hardest things to do when bills are adding up and money is tight is to organize where the pay check needs to go. We did this by using a few strategies from David Bach. Separating our pay checks into – Bills – Savings – Investment etc. This way everything was always divided and it became a habit.
- WE ATE ALL THE FOOD IN OUR HOUSE: I know this sounds totally insane is this not what everyone in America does WRONG – you will not believe how much extra food you have in your kitchen that is just asking to be cooked up – you may have to be creative but its worth it. Out side of the essentials of maybe bread – milk or eggs. We challenge you to do this. We ate for TWO full months with out never going to the grocery store except to purchase milk. And to be honest were veggie now so even that is excess water is perfect.
- SPREAD SHEETS – All of our income and expenses is now in a spread sheet and updated monthly to make sure we are on track.
- MAKE MORE MONEY – For us this was necessary if we were ever going to make anything happen, we needed to take major action and utilize all the hours in the day to make money. We had income from two jobs and then we added a second income stream via Direct Sales and renting out 3 of the bed rooms in our home and the garage. The stories I could tell you with our room-mates from hell.
- ATTITUDE – this was essential – there is no poor me crap – we got our selves into this situation and it is our JOB to make it right. Keeping our minds in personal growth books and tapes kept us sane as well as being on the same page together as a couple.
- GOAL SETTING – Always the most critical component of making thing happening, having a mapped out plan and goals at the end of the tunnel.
Ryan and I were able to use all of these to pay off all of our debt, purchase another property, come out of the stress with great credit and move on. We continue to use these as we move forward.
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