A while ago, I wrote a little bit about how my family managed to get out of approximately $80,000 worth of debt. Our debt was from pretty uncomplicated sources- credit cards, a line of credit and a student loan from when I got my psychology degree.
Getting out of debt was hands down one of the greatest things that we accomplished.
The debt free life comes with a few perks, a couple of them in particular really stand out. The first is that you don’t end up hyperventilating and Googling how to sell you organs when something major happens that requires money to fix (for example a large car repair). The second is that your money stays in your sphere instead of being funneled away to cover interest.
If you have debt, you may have noticed that despite forking out a lot of money you may not be making much of a dent in your principal. This is because of interest that you are paying out! A huge motivator for us was to pay off debt sooner so that we were paying less interest in the long run.
TEAM “FUCK THE BANK”!
Getting out of debt was simple but it was not easy. Simple in the way that everyone can do it but not easy in the way that it took a lot of sacrifice. However it may have taken less sacrifice than some. You see, our debt did not come from large purchases, vacations or fancy/luxury items. Therefore we weren’t sacrificing any vacation habits or any other luxuries in order to tackle the debt.
The problem with this is that we amassed so much debt just by being unwise with money. We didn’t put much thought into how much we were spending at the grocery store, on takeout or on silly little convenience items.
There are a lot of resources out there for getting out of debt, and services that can claim to help. In my experience, a huge advantage we had was a drive and desire to want to fix the problem. We were sick of being in debt, paying off interest and getting nowhere. So the first part of our debt free journey was definitely a shift in our mental attitude.
The One Resource We Used to Get Out of Debt
When my husband started looking into creating a budget and debt repayment plan he found the holy grail that helped us get out of debt once and for all. And luckily for us it was being offered free of charge.
This resource was a website full of Excel resources called Vertex42.com. This is a website that has Excel templates for a variety of different uses. Prior to finding this site, I had only used premade Excel spreadsheets at work and had no idea how to use the program.
Paying Off Debt
The first template from this website that we used was the Debt Reduction Calculator.
We entered our debts in order of highest to lowest interest and started to tackle them one at a time. Once we would pay off one debt we would add the payments we were making to the next debt so that we were paying off more and more as we went along. Thanks to the graphs we were able to view doing so as a kind of “game”.
We loved to tinker with the numbers to see that when we put more money in we were able to pay off our debt faster. We enjoyed watching our graph especially if we had lump sum payments that got us closer to our goals. Every extra dollar we had went into paying off debt, and rather than taking 7 years as we originally thought, It took us about 4. Now we are debt free!
To create a monthly budget we used the Monthly Household Budget Template.
We used this spreadsheet to create our budget and track our adherence to it. We would break down any receipts we had and entered them into the sections they belonged in. For example, if we bought groceries and clothing at one store we would break the receipt down and enter each total on the line that it belonged on. We did some customizing of the fields so that this spreadsheet would fit our lifestyle.
After a while of using this system, we started to take the totals from each month and upload it into another template that was available from Vertex42. This is the Yearly Money Management Template. We use this to track our overall progress with our monthly budget in one place. We take the numbers from each month and enter it into this sheet to see how we are doing at a glance.
With these three free templates we were able to pay off debt and get a handle of our spending. Although we are now debt free, we will continue to use these templates as they help keep us on track towards our goals. Now instead of using the debt repayment charts, we are using the templates for Money Saving.
This experience taught us to be wiser with money and brought us closer together as we kept focused on a common goal. I am so grateful that this site had these templates available! If you are looking into starting a budget I highly recommend that you check out the templates that Vertex42 offers.
What are your favorite financial tools?
Have you gotten out of debt successfully? How did you do it? Let us know in the comments below!