Whenever I talk about how my family has worked hard to become debt-free, I usually hear at least once, “yeah, but that would never work for us because we’re stuck living paycheck to paycheck.” Trust me, I totally get it. Just because I know how to budget doesn’t mean that I do it perfectly and doesn’t mean that we’ve never found ourselves living in that dreaded paycheck to paycheck cycle. 

So what do you do? How do you make paying off debt and getting out of the paycheck-to-paycheck cycle a reality?

Budget

Yep, you first have to budget. The budget is key to anything and everything financial related. Without knowing how much money you have to work with, you’ll never been able to succeed at managing your money well. 

So if you don’t know to budget, head here to read my quick start budget which is perfect for breaking the cycle of paycheck-to-paycheck. 

Once you’ve gotten the habit of budgeting down, start finding room in your budget to start working on your emergency fund (if you don’t already have one in place), and then once you have your emergency fund, start adding in extra funds for your debt payoff plan of attack. 

Did you just go, “BUT I DON’T HAVE ANY EXTRA MONEY! I’M LIVING PAYCHECK-TO-PAYCHECK!!”? 

Hear me out. Usually, we can find extra room in our budget by either cutting expenses or earning additional income and even sometimes by doing both. The thing is, if you truly want to get out of debt, there is a way to make it happen. 

I know it sounds lame, but the old adage of “where there’s a will, there’s a way” is completely true in this case, because there is always something that we can do in order to improve our financial lives. The problem is that it usually isn’t an easy “fix”. It’s usually extremely hard. 

And that’s what stops us. 

We have to make hard decisions – the kind we’d rather avoid – and because of that, we just stay stuck in a seemingly never-ending cycle of never having enough money. 

Stop Waiting

Once again, we tend to wait around for things to change. No, we don’t typically do this “waiting” on purpose. We just procrastinate because we don’t have the time to mess with it or we don’t know how to do it, or we just flat out don’t want to. 

“Deliver yourself like a gazelle from the hand of the hunter, and like a bird from the hand of the fowler.” – Proverbs 6:5

Here’s the thing, the only person that can make you change is YOU. Period. End of story. 

Real change only happens when you decide to change. So if you’re waiting around to make these changes, you’re going to be waiting a long dang time. There’s literally no time like right the heck now to make these changes. 

Let it Go

Did the Frozen theme song just pop into your head? You’re welcome. Okay, all jokes aside, you need to let it go. Usually when we’re feeling overwhelmed or like we don’t know how to start it’s because we’re holding onto something that we should let go of. 

It could be fear. It could worry. It could be doubt. 

It could be any number of things but the longer we hold onto those feelings the worse things become because we end up waiting too long to take action. 

Emergency Fund

Okay so now that I got my little pep talk out the way, here’s the real deal on making getting out of debt a reality. The first thing you have to do after you budget is to set up an emergency fund. Now, I’m not going to go into crazy details on setting one up in this post because this video goes way more in depth. The key thing with an emergency fund is to pick your starting point and move up from there. But once you’ve hit your starting point, that’s the point that you start attacking your debt like a crazy axe-man. 

Attack Debt

Rule #1 when it comes to getting out of debt – STOP USING DEBT! You will literally never become debt-free if you’re still using debt. If you truly want to become debt-free, stop using it. 

Next thing you’ve gotta do is set up your plan. I prefer the debt snowball method as it’s how we got out of debt and it’s super easy to set up – no hard math required!

List out your debts from the smallest balance to the biggest balance. Then list out your due dates, minimum payment amount, and the amount you plan to start paying every month. The amount you plan to start paying that lowest balance debt comes from your budget – the extra money you made happen. If you need a template for this to better paint the picture, head here to download my free excel template. 

Then, you just stick to the plan and start killing off each debt – one by one. Trust me when I tell you it’s like Christmas morning when you cross off that last debt and get to scream HELL YES!!! Not to mention the huge sigh of relief now that the burden is off your back.

It’s incredible and I truly want you to experience this freedom because it’s amazing. 

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