I’d like for you to dream a little with me. Imagine making your monthly budget and never having to account for debt payments again. How much could you save? What bucket list items could you finally accomplish? I actually did some dreaming of my own prior to writing this post. I could save $1,500 a month if I eliminated my debt. That’s $18,000 year! My Toyota in the garage? It would be paid for. My Arizona State diploma hanging on the wall? I could finally look at it without shaking my head (or my fist).
I could do all the things I’ve been dreaming about for years: travel the world, buy a really nice car, flip properties, pay for my accounting degree without stressing, run destination marathons, and finally buy R. that used Maserati he’s been eyeing (yes, I would love to be that girlfriend).
Let’s step back into daily life. What if the next time your car needed an expensive repair, you could pay for it with cash? Or if your kid needed a filling done, you could rest easy knowing you have the money?
Your turn now. Make yourself a quick mock budget as if all your debt was paid off. Credit cards, student loans, HELOCs, car loans, medical bills – everything. Mull over that for a second.
That budget, the dream budget, is what I want you to keep in mind during your debt payoff journey. That is what we’re working towards.
On to the not-so-fun part. Yes, the debt list. I can feel your dagger-eyes, but we’ve got to start somewhere. Here’s what you do:
- Write down every single debt you have, including medical bills and loans from friends/family but excluding your mortgage
- Organize the debts from the smallest amount to the largest amount (we are ignoring interest rates on purpose)
- Tally up your debts and write it down at the bottom of your list
- Add today’s date so you can go back and reference your starting point
It could look something like this:
If you’re kind of a dork (I am), you’re welcome to throw your debts onto an excel spreadsheet.
Freaking out? Focus on the dream I just led you though. Keeping thinking about what your life could look like a year from now. 10 years from now.
I’ll be posting again in the next few days with the next step. Until then, get those lists done! I’ll leave you with this for inspiration:
Any comments, questions or criticisms are always welcome. Hit “Like” if you like this article!