I keep a Gratitude Journal. Every night before bed I write down 5 things I am grateful for.  Here are some financial examples from over the years:

• I was able to pay more than the minimum on my credit card bill
• I sold an item and put the $40 towards an extra payment on my student loan
• I worked an extra hour and that money will go toward my car loan
• Got a flat tire today. Was able to pay for the repair with my emergency savings and not with my credit card
• The store credit card bill was lower than I expected
• I paid the bill before the bill arrived

Acknowledging my successes kept me motivated. It was no small effort and I needed all the help I could get.

You are on the path to paying off your debt. This is a long journey and there will be many challenges. You may want to quit before you get there. Don’t.

Congratulate yourself for taking the first steps. Celebrate all the good work you are doing and will do.  Remember to celebrate with something that isn’t going to give you more debt. For example, we love to treat ourselves with summer picnics in the park where they show free movies or concerts.

We want to hear from you!  Tell us how it’s going.  What you share may inspire others to keep going.

With Step 5, we’re going to get into the hard stuff – the actual debt payoff.  If you have kept up with the series of newsletters or the Facebook group, you have completed the following:

• You have reflected on the actions, inaction, thought process, or events that got you into debt.
• You have “faced the truth” by compiling a complete list of your debt.
• You have reflected on ways that you can find more money in your budget or bring in more income.
• You have started your emergency savings plan.

With these steps in place, it’s time to create your own custom action plan for paying off the debt.

To start, you need to do some brainstorming.

Sit down with paper and pen (or at your computer) and write down your answers to this question: “What can I do today to lower my debt?”  Just write the first  20 ideas that come to mind – you can worry about whether they’re even possible later.

Your list might look like this:

“What can I do today to lower my debt?”

1. Consolidate my credit card debt into one monthly payment
2. Apply for a home equity line of credit for debt consolidation
3. Sell home and downsize
4. Live frugally and only buy essentials so that I can pay off the debt faster
5. Stop funding my / our retirement until the debt is paid off
6. Apply for zero percent balance transfer to pay off debt quicker

Now, put the list away and wait a few days. Stepping back from what might be a difficult choice will help you reevaluate your priorities.

After 2 or 3 days, come back to your list and choose one. There is no right or wrong answer. Remember, you are designing a plan that tailor-made for your individual goals and needs. You have to determine what is best for you and your situation.

Now, go through the process of exploring whether that choice will work for you. You may have to contact a third party like a bank, mortgage broker, real estate agent, etc. You may have to look for zero percent balance transfer offers. You may have to get the whole family on board to see if they can live on a smaller budget.  If it all works out, then you can start your plan. If not, go back to your list, choose another option, and explore it thoroughly.

Because you didn’t accumulate your debt overnight, it won’t be going away overnight either.  You will make your choice (you can try many choices on the list), and you may need to follow through on it for over a year or for several years.

This whole process is definitely worth your while, because you will gain control over your finances.  You will stop working just to pay your creditors, and actually save money as you eliminate the finance charges you’ve been paying.

Yes, I know (and have been there) that these are hard choices to make.  But if I can do it so can you.

Step four might surprise you.

I want you to start an emergency savings account and your goal is to save an initial $1,000.  Yes, you read that right.

Why would I tell you to put money into savings when you’re trying to pay down debt? It’s not like the interest you earn is going to be more than the interest you’re paying, right?

Because, if you don’t have a savings account to fall back on, you’ll be back in debt the next time you’re blindsided by an unexpected repair or medical bill. Life happens. If you don’t have money in the bank, how will you pay for the surprises it brings? With a credit card or a loan? It’s a bad habit, and it’s better to start breaking it now rather than later.

Just like your debt didn’t happen overnight, your emergency savings isn’t going to happen overnight, either.

1. Make a plan to save money from each paycheck.

2. Start small with $5 per week and increase over time.

3. Remember to pay savings first (and automatically) before you pay the bills.

You can put money in savings automatically through your payroll department. If you don’t have a direct deposit service through work, you can set it up with automatic transfers at the bank.

As I said, start small and work your way up.  The ideal goal is to put 10% of your income into savings.  But first, start with the emergency fund so the little emergencies don’t discourage you from your quest of paying down your debt

Next issue: We will actually start paying off your debt – bet you thought we wouldn’t get to this.

In step 3 of Say Bon Voyage to Your Debt, we are going to look at ways to find more money.

One way to “find” money is by plugging the leaks in your spending. You’ll take back that wasted cash and put it where it can do some good. To do this, you need to know where your money is going, and that means tracking your spending.  For more information on how to do this, see Step 2.  We personally do this several times a year, and we are doing this for July along with the group.

You are going to have to make some tough choices by reducing and eliminating expenses.  Here are a few common budget leaks to get you thinking:

• Bring food and beverages from home versus buying out.

• Rent a movie from the library and make homemade popcorn instead spending $20 each at the theater.

• Have a potluck dinner with family and friends instead of splitting the cost of a restaurant bill.

• Institute a “don’t buy” month (you can buy needs but not “wants”).

• Do free activities – in summer there are lots of options.  We attend festivals, and concerts and movies in the park.

• Reduce your bills by eliminating unneeded services (lawn, cable TV, premium channels, etc.)

• Do things yourself versus hiring someone.  Some home projects can be tackled with the help of the internet and your hardware store’s advice.

• Buy used versus new. About 20 years ago we bought our patio set used for $100 (table for six, including cushioned chairs, chaise lounge, and end table).  We are still using this set and have only replaced the cushions.  It would have cost ten times the price if we bought it new.

These are just suggestions. Think about your own lifestyle to find reductions that will work for you.

Another way to find money is to make money.  You don’t have to get a second job, necessarily. Here are some creative ways to increase your income.

• Sell unwanted items for cash. Think tag sale, online sales, free classified ads in a local paper, etc.  People love a good deal! We’ve have sold everything from new toothbrush heads to a car online.

• Earn some extra cash. There are websites that will help you connect with people who need your skills. Do your research before you commit.

• Use your hobbies to earn extra money. Don’t start a business that requires lots of money. Instead, rent out your skills or sell your handiwork. If you’re a gardener, rent yourself as someone who does spring planting or puts the fall plantings to bed. If you’re a scrapbooker, organize other people’s photos. Do you have extra handiwork laying around? Sell it on Etsy.

• Rent out extra space. Do you have extra space in your garage or a spare bedroom? Rent them out. Again, do your research and get references.

Now think about what you can do to earn money. You might be surprised at finding an enjoyable second income that works well for you and your family.

For more information and support, join my free private Facebook group “Say Bon Voyage to Your Debt”. We officially started on July 3, but you can still join to get the individual support and worksheets. Sign up here: www.facebook.com/groups/PayOffYourDebt/. To receive a bonus budget tracker, sign up through my newsletter

In our next issue, we will tackle something unexpected.