We are officially to my favorite part of the year. The warm colors, the family…
Debt can feel insurmountable, but it is not the end of your story. Check out our simple plan to get out of debt with 5 simple steps and Farther Finance.
Disclosure: I am partnering with Farther Finance. All opinions are my own.
Keeping Up with The Jones’
When 2020 started, my husband and I were doing great financially. We had just a single credit card to pay off which only had our kitchen remodel on it and the money coming in was plenty to have that paid off pretty quickly. We both work essential jobs so when COVID hit, finances were not an issue for us. However, 6 months later, after trying to keep up with the Jones’, we found ourselves in a bit of trouble and stressing about money.
My husband and I have always been pretty fiscally responsible. My parents were insane about managing credit and savings and overall just being good with money, and it is something that holds a huge importance to us as well. Typically we only put stuff on a credit card if we know that even if one of us lost our jobs, the bills could easily be paid. However, after a rush into elective surgery last summer, a blown transmission, a broken computer and purchasing our dream fifth wheel, we were in over our heads.
To be clear, we are fine paying our bills, we could afford everything that came at us (and still can) and we do know that these are temporary expenses, however, we also got caught up in the land of isolation, daydreaming and a little ahead of our goals that we had set in terms of the camper. Normally we set aside money each year to travel, to do some home reno work and to enjoy and instead we just spent like crazy and really forgot to be prepared for the unexpected and that is where we got into an uncomfortable financial place.
Getting Out of Debt
We always carry a small credit card balance. Usually it is paid off each month, but right now, that balance is well over the amount to be paid off. Right now, if we had to pay off the credit cards we would be about $2000.00 short and the savings account would be empty. We are living beyond our means and that took some serious reflection at the end of 2020 and some new goal setting to get things back under control. Our goal by the end of 2021 is to be out of credit card debt and to save $20,000.00 in the process and we have come up with a simple plan to get out of debt.
A Simple Plan to Get Out of Debt
- Pay Off Credit Cards: I mean obviously, but we are going to do the rolling payment method. We will start with our lowest debt and pay that off first while paying minimum payments on the other 2 accounts. Once that is paid off then we will roll the amount we were paying on that card into the next debt and so on. With this method and the budget we have to pay off the cards, we should have the credit cards completely paid off no later than December, but our goal is actually July.
- Stop Eating Out: I made mention on my IG stories last week that we spend at least $1500.00/month eating out. I have so many ridiculous reasons for this but none of them are truly valid and so I have worked in the last week to make meal plans, with cooking schedules. Instead the money we waste on eating out, will go directly into our savings account to build up that $20K.
- Refinance Our House: We have a lot of equity in our home and are not super happy with our current lender, so we are refinancing the house and rolling our high interest camper loan into the house. After calculating it all out, we will actually pay less for the camper in the long run and with the lender we chose to use, we will do biweekly payments with extra principal to have the house paid off in 15 years when I retire. In the end we will pay less in interest and save a good chunk of cash. Bonus to this is that we save on a huge monthly payment from the camper and our home payment only increased $100/month. The money we save from the camper will be split between debt payoff and the savings account, sending about $300 each direction.
- Switch Service Providers: To be honest this has been on our list for a long time, but we are getting nickel and dimed with our current ISP, cable and insurance companies as well as our cell provider. We have calculated that we can save about $300/month switching providers and are working this month to make those switches. For a long time we were pigeon holed into providers based on where we live and now we have many more options and just need to bite the lazy bullet and make the switch.
- Financial Management: I looked over winter break and realized that I have been teaching for 12 years and will be eligible to retire in 14 years. We have a lot to accomplish in 14 years if I want to have a worry free retirement and so we began looking at financial management companies. We found Farther Finance and are elated to start working with them to really give us a good long range financial plan. I never want to be in this financial place again and definitely having some experts guide us is something we clearly need.
Farther Financial Management
For some background on Farther Finance, they are a platform based management company that assists in helping their clients meet their financial goals, responsibly, with no hidden fees and personal financial advice. They have 4 financial advisors that you have access to and you can use them for everything from cash management, investments and even retirement goals.
You have the ability to set up unlimited goal-based accounts to help save for things like emergency funds, IRA’s and even travel expenses. Farther also helps you manage your returns and utilize tax-advantages accounts to reduce tax liability. It really is a great platform to help responsibly build your financial plan, manage your wealth and have expert financial advice without pressure and insane initial investments. If you are looking at creating a simple plan to get out of debt, make sure to check out Farther.
These 5 steps are a great simple plan to get out of debt. Would you add anything else?