Now that you’ve written down your monthly expenses, I’m sure you have started to see spending areas in which you can cut back. Remember, when you are getting out of debt, it is imperative to make short-term, temporary sacrifices now so that you can win financially long-term. Everyone’s situation is different, and everyone has different sacrifices they can make or that they’re willing to make. If you’re living in a one-room shack with a blanket on the floor and no other furniture, then you probably need to find another way to get out of debt. If you have some resources, think about what is most important. Think about what you can give up so that you are not continually on this hamster wheel of going deeper and deeper into debt and not being able to pay for the most important things. If you have nothing to sell and are living a very bare existence, you may need to get a job, a better job, or a second or third job. Perhaps you can start your own business from a hobby with very little start-up costs.
If you can’t bring in more income, then you MUST cut spending. This is why examining your expenses every week for at least the first three months is really important. You need to have a conversation with your partner, or with a friend if you’re single, about what else you can live without short-term while you’re getting out of debt.
Getting out of debt comes down to living on less than your means.
After you look at your Four Walls™, you can start to prioritize what is most important after that. For me, when I was going through my debt-free journey, selling my car wasn’t really an option. I needed to drive ten miles each way to work. The things that I decided could go were my cell phone and my cable TV, and I turned both of those off. I went to the hardware store and bought a 15-foot antenna for the roof. It probably only cost $100, and it worked just fine for the channels I wanted to watch. Those steps saved me about $75 a month, which went toward my smallest debt. What are the things in your life that you feel like you and your partner can give up as short-term sacrifices so that you can pay off your debt so that you can build wealth long-term?
