If you read this post from August, you'll know that I acquired quite a few hospital bills and was held hostage by insurance co-pays. In a few weeks, I depleted my savings and started to understand how expensive and broken our healthcare system was. There were a few solid months when I had to put my student loans and credit card bills on hold, digging myself further into a hole of debt.
But debt is nothing new to me and not all debt is bad debt. If anything, my finance skills have matured so significantly in the last two years - I've impressed myself while growing my credit score and savings. I've been in this pit before (almost considered bankruptcy at age 20) and know firsthand that I'll be able to pick myself up again.
Instead of being silent about this, I'm outlining exactly how I'll tackle my debt in case it's helpful for others.
First, Tackle Your Debt:
List Out Your Debts
This activity makes me cringe the most, but it keeps me aware of who and how much I owe. This, in turn, becomes my running list when it's time to set goals or pay off bills. My list is arranged from the lowest to highest debt. I try to pay off the smaller debts first since it gives me more gratification and keeps me motivated.
Set Clear Goals
If my goals aren't written out with concrete deadlines or broken down into smaller actionable items, there's a 98% chance it won't get done. So instead, I write down a clear and concise goal and plan on how I'll tackle them. For example, instead of writing down "I want to get out of debt" I write, "I will bring all my credit cards down from 86% usage to 35% usage by the end of 2017 with $600 from every other pay cycle."
Manage Your Finances/Budget
At the end of every week, usually a Sunday, I sit down and open up Mint.com. I absolutely love the site and app. It's at-a-glance look at my finances, overspending alerts, and bill reminders have simplified money matters for me. From there, I'll see where I'm overspending and cut back on certain categories. Without fail, I always spend a little too much on Ubers and eating out.
Rainy Day Funds
Some may argue that one shouldn't concern themselves with a savings account and should instead put all their money towards paying off their biggest debt. I couldn't agree less. From firsthand experience, my savings account saved me crisis after crisis. Emergencies strike at the worst moments and money is crucial for some big decisions. With that being said, make the most of your money and sign up for a high-yield savings account. I'm a fan of Ally Bank.
Now, Increase Your Funds to Help Pay it Off:
Stop Throwing Away Money
This. Stop doing this. A few ways to do this: don't use ATMs not associated with your bank (ATM fees), pay your bills on time (late fees), don't spend your money when you don't have any (overdrawn fees), get rid of cards or banks that come with annual fees. Regardless of how big or small the charge is, it all adds up!
Loose Change Adds Up
Some folks swear by Acorn. I'm old fashion and use a piggy bank. At the end of every week, I dump my coins into an IRL piggy bank and once it's at the top I head over to my bank and transfer the new funds into my account. From there, it'll be used to pay off one of my bills or added to my savings.
I definitely get my hustle genes from my dad. Out of my core group of friends, I've had every single odd job out there and have absolutely no shame in letting people know that yes, I've walked dogs, cleaned apartments, and waited tables. In the long run, this extra source of income has helped me crush finance goals and allowed me the privilege to travel. A few of my favorite apps in securing side hustles include: Care.com, Pinata, and Jobble.
Clean Out Your Closet
I've written about this before so I won't go into too much detail. I will say that purging my closet is one of the easiest ways I can make a quick buck. Poshmark is by far my favorite reselling site, check it out and get $5 for signing up with my link - make sure you use this code PCISZ when prompted.
To hold myself accountable and because I like being honest with you guys here are my overall goals: decrease debt (credit, medical, and school) or at least get it under control by the end of 2017, rebuild my rainy day fund, and increase my credit score. I'll let you know how it's going from time to time :).
Wanna chat savings? You might like this post!