How to Get Out of Debt in 5 Steps

Part of being healthy means not being stressed out. One HUGE stress reliever is LOW to no debt. If you are being crushed by debt it is time to do something about it.

As an accountant I LOVE working with numbers and I was so excited when Beachbody rewarded some of us with a private lecture from Rachel Cruz this month on how to manage our money. I learned so much and will pass the GOODIES on to you.

How to get out of debt step-by-step:

  1. Make sure you have $1000.00 put into an emergency fund. THEN…
  2.  Make the minimal payments on all of your debts except for the one with the lowest balance. Put as much as you can on that one. Once that is paid off move to the next debt with the lowest balance. This is the snowball effect which I am sure most of us are familiar with. Do not include paying off your house with your debt.
  3. Once your debt is paid off, save up 3 months worth of living expenses.
  4. From here you can start saving for the future. Start putting 15% in your retirement and saving for your kids college.
  5. Once you have all that accomplished you can take the extra and start paying off your house.

Additional tips:

  • Be giving. Pay it forward, donate to a charity…you will be rewarded for your generosity and it feels good.
“Give a little until you can give a lot”
  • Don’t worry about what other people think of you and what you OWN. Who cares! If you own a fancy car you cant afford, she said sell it, buy a cheap one, and pay off your debt.
  • Set up a budget and stick to it. She suggested “every dollar”.
Have fun!!! My budget is all set.

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