I think one of the hardest things about paying off debt is getting started. I was in debt for close to ten years before I considered really paying them off. To me, it was just a way of life, the all-american way. Everyone has debt and it’s normal, right?

The irony of the whole situation is that seven years ago I had more than enough money to write a check and pay it all off, but in my mind it was better to have money in the bank. I suppose ignorance is bliss, even if only for a short time. It wasn’t until I filed for divorce, living on my own, and completely broke that I decided to come up with a plan to pay off my debt.

Amidst divorce attorney costs, high rent, enormous debt and inconsistent income, the hardest thing about my debt was getting started. I was overwhelmed and did not know where to start. I was staring at over thirty thousand dollars in debt and that did not include my car loan, which was an additional fifteen thousand. Being self-employed and having very inconsistent income, a budget was next to impossible. I also had a poor relationship with money.

So if like me, you have:

  • Inconsistent income
  • Have enormous debt
  • Have no idea where to start
  • Are completely overwhelmed to the point of ignoring it all
  • Or paralyzed and battling depression

Here are 14 secrets that accelerated my progress, and got half my debt paid off within 8 months, and you can too!

14 ways to reduce debt, even with irregular income. | GatesInteriorDesign.com

1) Discover your relationship with money

This was something I never even considered as a part of the “debt” conversation, but a friend of mine who works exclusively with women, says many of us fall into one of eight categories:

  • Ruler – Challenge yourself to achieve more and money is power and identity
  • Romantic – you buy to feel gratification, to feel good, and refuse to be a slave to money
  • Nurturer – Appreciate money but over give. You protect, nurture others financially and often attract those who need help.
  • Connector – You easily create long term relationships that connect you to income but you hate to even think about money, and look to others to make financial decisions.
  • Celebrity – Money is a tool to achieve your desired status and you easily spend to increase that status. You love to impress.
  • Alchemist – You prefer unconventional ways of making money and you care more about social injustice than making money.
  • Maverick – You are attracted to get rich opportunities and are willing to take huge financial risks
  • Accumulator – You tend to judge others for their money habits and always live below your means.

Understanding your personality and your relationship with money, helps you determine your “why”, and helps you understand what type of plan to put in place to help you excel rather than fail at paying off debt.

2) Avoid new debt

This one seems obvious, however as you begin to pay off debt, those tricky creditors are taking notice, making sure to put “new offers” in front of you. Depending on your relationship with money, you may be tempted to apply. Just say no. Rip it up quickly so you are not tempted.

3) Itemize

First things first. Itemizing where you are at, and seeing on paper what has what balance, and interest rate helps you determine a plan. It also puts a real number in front of your eyeballs to see where you are at. Over 50% of Americans do not know the exact balance of their debt. And their “rough estimates” aren’t even close – so real numbers win over fuzzy math and makes your plan more tangible.

4) Focus

The biggest mistake I see many people make is looking at all of the debt and trying to tackle it all at once. I too made this mistake. I would throw $100 bucks at one debt, $75 at another and kept this routine up, thinking that paying above the balances was getting me traction. Problem is I wasn’t getting anywhere fast. When it comes to debt, faster, and quicker is the name of the game. Pay minimums on ALL cards except one. It helps chunk out debt much faster and you will feel more accomplished, inspired and motivated.

[Tweet “How to deal with debt and keep your sanity? Focus on one at a time.”]

5) Start small

Many experts say that it’s best to start with the largest debt, with the highest interest rate. I strongly disagree with this notion. If you are staring at a credit card with five thousand dollars on it, and the most you can pay is one hundred dollars a month, your discipline will turn into frustration very quickly when after five months of sacrifice you reap little reward. Compile your debt from smallest to highest. Focus only on that one debt and pay the minimums on everything else. I was able to pay off my lowest debt in three months and I felt like I was finally making a dent in the overall picture.

6) Negotiate

I tried to do this myself and had zero luck. They basically looked at my debt and my credit score and knew they had leverage over me, which left me no options. But many of my friends have been able to call their credit card companies, banks and even the IRS and get interest rates and payments lowered. It only takes thirty minutes to one hour of your day to make phone calls, and it could save you a combined $50 to $150 dollars in savings that can go toward the one debt you are focusing on.

7) Ditch the budget

Every financial guru will tell you that you must put together a monthly budget. I hate the word budget. To me, it goes hand-in-hand with the word diet, and neither work. It’s about creating a lifestyle change and looking at the over all picture in a new way. Budget means sacrifice and like a diet, it means pain.

Vision gives the pain of change a purpose, but without that vision, you’re stuck in a budget. And depending on your relationship with money (the 8 listed above) you may intrinsically do everything you can to sabotage your “budget.” Instead choose financial free plan, security plan, nest egg – whatever works for you so that it becomes a lifestyle change and not a temporary fix to pay down debt. Simply changing the language and having an overall financial vision immediately changes the way you spend and view money.

8) Slap a date on it

You don’t have an eternity to pay off debt and it’s been proven that our minds work better with goals. Push yourself and slap a date on your calendar that states when you will be debt free. It makes it feel more tangible and helps you stay on track.

[Tweet “Even debt has an expiration date.”]

9) Avoid debt management companies

There are a few that are good, however most have an agenda. Remember, they are a business and need to pay their bills to keep their lights on. So in order to consolidate your debt, or give you the fairy-god-mother of all results, they need to charge you for it, and unfortunately, it tends to be a very unfair amount. Instead, use companies like debt quencher, Ready for zero, Suze Orman, power pay, bills.com, mint.com, or expensify. Those are just a few of the great resources I used, and there are thousands more.

10) Record, record, record

This can be a eye-opening experience. You don’t spend any extra money but when you track it you learn how you spend it. We often associate “extra” with big purchases, and many will argue that there just isn’t enough left over to pay bills, let alone credit card debt. But take a closer look and you’ll see where you can spend and where you should eliminate:

  • Cable
  • Groceries
  • Restaurants
  • Rent
  • Car
  • Utilities
  • water

I guarantee you if you take a closer look, there is a place where you can free up at minimum twenty bucks a month, and most can free up several hundreds, especially if you are a small business owner. I did this to the extreme. I auctioned off everything I owned, down to my silverware, sold my car and moved in with a room mate. I saved five thousand dollars a month! We often think we can’t, when in reality we won’t make the changes that are necessary to create real change. So buck up, and make the sacrifice.

[Tweet “When it comes to debt, quit making excuses and get sh*t done.”]

11) Categorize

Categorize your spending. This helps “micro-manage” your freedom plan (discussed in number 7 above.) It’s great to have an overall idea of where you want to be but let’s say you’re a romantic or a nurturer when it comes to money (refer to number 1 above if you are lost) that means you like to hold true to fuzzy math and are willing to sacrifice in ways that could hurt you, when it comes to your money. This is detrimental to those who are trying to get out of debt, unless you know you have the extra funds. Create categories for each of the major areas of your freedom plan and if there is extra money, then feel free to give it to the friend who needs a new tire – otherwise, if your category is empty and spent for that month, NO becomes a complete sentence.

12) Rinse and repeat

Once your plan is in place, you rinse and repeat at the first of the month. Set aside a day of the month every month that you pay bills. Mine has been the 6th for over twenty years. I used debt quencher to help me know where I was at each month and where I had made progress. It also kept the paid off loans on my spreadsheet which kept me motivated. I also have an excel spreadsheet that has all my debts on it so I remember which ones to pay.

13) Be accountable

The best motivator in the world is to pay off debt in public. In other words, make yourself accountable. Write about it on Facebook, your blog, your family – whatever works best for you, but put the info out there so you stay accountable and focused.

14) The big payoff

Being in debt plays a huge psychological role on you and can do a number on your self worth. It can be easy to fall into a trap of guilt, failure, feeling stupid, and feeling overwhelmed or helpless. Many Americans become so paralyzed by their debt that they fall into deep depression and some even commit suicide. It’s America’s deepest secret, the flashy neighbor who appears to have it all, but in reality has nothing.

Money is only energy, so don’t allow it to take control. Small steps make big changes and it’s important that you do everything you can to stay pumped about becoming debt-free. There is a light at the end of the tunnel, and that is the big payoff: financial freedom.  I myself set up a vision board. I found this to be incredibly motivating. In those beginning months when it seems like you aren’t making any progress and the fear of “OMG this is going to take forever!” sets in, have something that motivates you and keeps you on track.

[Tweet “At the 6 mo. mark I started to see considerable change in my financial health.”]

My credit score started to climb, and as my debt started to go down I didn’t have a huge weight of fear lingering over me. It also made those months of considerably less income, a lot more manageable. For those who have a set income and know exactly what they are getting each month, paying off debt can be pretty simple. But if your income is irregular and jumps considerably from month to month, debt can be like a roller coaster – and can make it easier to default on your plans. And if you are a small business owner, you may make harsh decision’s, or fail to make necessary decisions. Stay focused, stay accountable and when you become debt-free, it’s time to start saving for retirement!


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