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2 Easy Steps To Pay Off Everything You Owe

2 Easy Steps To Pay Off Everything You Owe

“You work too hard to get to the end of your life and have nothing to show for it!”
— Dave Ramsey

Yes, there are just two fairly easy steps to get you on your way of paying off every debt you owe. I had first heard of Dave Ramsey while scrolling through Facebook. Then immediately after that, I was told about him 2 more times. Ultimately, I was introduced to Dave Ramsey’s 7 Baby Steps plan to paying off debt within the short stretch of two weeks. I knew it was something that I had to consider and I’ve been hooked ever since. It’s such an easy plan.

So, what are those two easy steps? Well, the first step is to save up $1,000 cash in a beginner emergency plan. There’s a reason for the nice round number. Most emergencies (i.e. one of your tires blew out or your brakes are squealing) usually cost around $1,000 – and no, vacations do not count as emergencies. Instead of having money saved up to take care of unexpected events (that WILL happen), people usually go into more debt by getting a payday loan or taking an advance out on their credit cards (which usually costs you more in the long run when you must pay it back as credit cards companies charge a higher interest rate when you get advanced cash).

The first step of the Dave Ramsey plan calls for you to save up $1,000 as fast as you can. That means if you need to work overtime, drive Uber or have a garage sale to get it, then do that. Don’t feel ashamed about not having the money already. You’re not alone. Nearly six in 10 Americans don't have enough savings to cover a $500 or $1,000 unplanned expense, according to a new report from Bankrate. The good news is that you don’t have to remain this statistic. Don’t complain, just do what you need to do.

The second step is my favorite because when you realize that you have paid off one bill in full, you become addicted to that feeling of accomplishment and you want to start right away paying off the next one. The second step outlines how to pay off all your debt except the house. First, list all your debts from the smallest to the largest. This is called the Debt Snowball. After you’ve listed your debts start to pay off the smallest one. Put as much money towards it as you can and keep doing that until it’s completely paid off. The same thing happens for each debt after that. Easy enough.

Now, I know we hear these stories of people who paid off over $100,000 or so of debt in 2 years but the reality is that those type of situations are very rare. Paying off debt is a case-by-case scenario AND it is a marathon, not a sprint. So, don’t get down if it seems that it’s taking you years to pay off debt. The reality is that it took you years to build it up. Debt doesn’t usually accumulate to unbearable mounds overnight.

If you want to learn more about Dave Ramsey’s Financial Peace plan, click HERE

The first bill I paid off in the Dave Ramsey plan was a Chase credit at $750. Care to share what you want to pay off first? 

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