2. We cut our expenses.
Once you have a written budget, you can start to see where you are actually spending all of your money. This was very eye-opening for us. We didn’t realize how much money we were actually spending on eating out. It made us question what we really needed in our lives to be happy.
Was the cost of cable worth it? After taking a full assessment, we made tons of cuts. If the expense wasn’t necessary for our existence, it was gone! This meant no more cable, an internet speed downgrade, cutting our grocery budget in half, stopping eating out, canceling our gym membership and stopping shopping for clothes on a regular basis.
We cut tons of expenses but immediately started saving tons of money. Even with the sacrifices we were making, we didn’t care because of the amount of money we were saving. These were the top 15 ways we saved a ton of money!
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3. We assessed our life insurance policies.
Prior to subscribing to Dave Ramsey’s teachings, I had a whole life policy from when I was a child. Dave recommends term life insurance policies for adults because you really only need the coverage in case you die. To learn more about the difference between whole and term life insurance, read this.
I cashed out my whole life insurance policy for the current cash value and threw it at our debt. Then we set up our term life insurance policies and haven’t looked back.
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4. We sold everything.
If you are holding onto tons of possessions, you could actually be staring at tons of money. I went through all of our furniture and possessions to find items we weren’t using, would never use and could live without. I sold local through the Facebook Marketplace, always felt safe and never had to worry about shipping.
Selling your stuff is this totally freeing process. It puts life in perspective in a whole new way. You feel lighter and less burdened by “stuff.” And as a bonus, you make money!
In addition to selling household items, I also dipped into my childhood collectibles to really boost our debt payoff. For me, that was my American Girl Doll collection from childhood. I chose to sell those on eBay as there was more of a market for them there. It really wasn’t challenging to set up the account and take care of the shipping.
If you have any collector’s items, check out eBay and see if there is a market for it. If you are willing to part with some of your stuff, you could make a ton of cash very quickly.
Do I regret selling my childhood dolls? No way! They were sitting in boxes, unused, I never would have let my children play with them and they helped us pay off debt! If I really want them again, I will buy them back when I am debt free. No guilt; just freedom.
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5. We utilized the debt snowball.
In Dave’s debt payoff program, he uses the debt snowball payoff method. You list all payments from smallest to largest and focus only on paying off the smallest debt first while continuing to make minimums on the rest. Then when the smallest debt is paid off, you take its payment and roll it into the next debt’s payment.
At the rate we were paying off debt, our snowball kept growing quicker and quicker. It was amazing! It was so encouraging to really see the progress we were making on our debt.
While we were going through it, I used debt payoff coloring sheets to keep a visual around so we could be encouraged every day. They hung in our bedroom closet where we would see them every morning. To see the progress was so motivating.
