Dave Ramsey has been a go-to for personal finance advice for decades. Thousands, and possibly even millions, of people, have turned to him for what they should do next. Ramsey’s specialty is reaching financial freedom, which we all want. The first step to achieving financial independence is paying off your debt.
That sounds way easier than it is though – so, how do you start paying off debt?
- Get organized. First, get all of your finances into one place so you can see everything. Mint is a great tool to use for this!
- Know how much you owe. Once you have all your finances in one place so you can see how each part is moving, write down how much you owe and what kind of debt it is.
- Start writing down a budget at the beginning of every month. A written budget is a great way to keep on top of things and you’ll be able to see and plan every part of your finances.
- Sell everything you can. In the video, Ramsey tells the caller to sell his $27,000 car. It doesn’t always need to be that drastic, but you can look for things around the house to sell or even downsize to one car if needed.
- Identify ways to trim your budget. Once you have been budgeting a month or two, identify places to cut cost. For instance, you will need to cut eating out, going on vacation, and many other fun things to achieve your goal of being debt-free (but it will be worth it). Check out this Budget Planner.
- Make extra money when you can. Whether it is picking up a second job, selling personal items, or odd jobs, find a way to bring in some extra cash. Then, put all your newfound money towards paying off your debt.
If you’re interested in learning more about Dave Ramsey’s steps to getting out of debt, check out The Total Money Makeover.
Readers, have you read or listened to Dave Ramsey in the past? What do you think about his response above?
Amanda Blankenship is the Director of Social Media for District Media. In addition to her duties handling everything social media, she frequently writes for a handful of blogs and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.