Hi everyone! It’s time for Dollars & Sense Tip #5, Paying down credit card debt. Let me start by saying that I am in no way a financial expert and I don’t claim to have all the answers. I just want to share with you what has worked for our family over the years in regards to credit card debt.
In the first place, we try to avoid using credit cards as much as possible! But everyone has those times when their emergency fund is gone and something comes up. When we first got married, we struggled to pay the bills like a lot of newlyweds who get married very young. We were 19 and 20 years old when we got married and I didn’t have a steady job so that made it really hard. We ended up with some debt and eventually I was working so we were able to get it paid down. Since then, we have gone through a lot of ups and downs with credit card debt.
We took a Dave Ramsey Financial Peace course at our church about 9 or 10 years ago and that had a major impact on how we looked at money. I would definitely recommend any of his books or courses!
According to what we learned in the course, the best way to pay down debt is to pay off your lowest balance cards and work your way up. He calls it a “Debt Snowball”. What you end up doing is when you get one paid off, you take the minimum payment you were paying on that one and add it to the next lowest balance card that you have and keep going until you have them all paid off.
It feels so good as you pay off each credit card and makes you more excited to get the rest paid off! I love the feeling of not owing on credit cards. The Bible says that the borrower is slave to the lender and that is so true. Having debt can feel like a huge burden and it can really drag you down. It can affect every area of your life. Getting it under control and keeping it that way can turn your entire life around.
Any extra money that you have left over after needs are met is best to put towards paying down credit card debt. Here are a few ideas on how to find extra cash to do that:
- Have a yard sale. It can be very refreshing to go through your house and clean out items you don’t need. While yard sales don’t bring in a ton of money, every little bit helps!
- Sell your kids old clothes & toys at a consignment sale. The Upscale Weesale is a great one that goes on once in the Fall and once in the Spring.
- Check around and see if you can reduce your cell phone bill by switching your plan or provider.
- Cut out cable. There are tons of options, like Netflix and Amazon Prime that will allow you to watch your favorite shows and not pay for all those extra channels you don’t need.
- Shop around for auto and/or home owners insurance. You may be able to make some changes on your current plan to reduce your monthly bill. We recently switched our van from Full Coverage to Liability and saved $25 a month on our bill.
- Check out my post on saving on your grocery bill HERE. Cutting down how much your spending on food can free up extra money to go towards those credit cards.
- Eat out less and cook at home more. Do some math and see how much you are spending on take out every month. You may be able to cut out one or two times eating out a month and have a little extra to put towards the credit card bills.
- Work on creating a good budget for your family and see where your spending too much money and where you can afford to cut back.
- If you have a high car payment, consider selling your car and buying a less expensive one.
- Pay in cash, Dave Ramsey calls it the “Envelope System”. The idea is that you spend less when you use cash.
I hope these ideas will help get you started thinking about how your family can work towards paying down any debt that you are struggling with. It seems to be a constant stress in most families, but it’s never too late to turn things around!
I would love to hear from you about how your family tackles those nasty credit card debts! I can always use new ideas!
Disclosure of Material Connection: I have not received any compensation for writing this post. I have no material connection to the brands, products, or services that I have mentioned. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”