How To Dig Your Way Out Of Debt When You Feel Hopeless

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Before finding the financial independence community, my husband and I were not being savvy with our money. In fact, we were being downright irresponsible. When we met, neither one of us had a crushing debt load, but we have both been there in the past. So we know how it feels.

If your debt load has you ringing your hands and racking your brain, know that there is a way out. Sure, crushing debt can be scary and intimidating, but if you face it head-on with a solid plan of elimination, you’re going to be shocked at how quickly those balances disappear into the past. And with that, let’s take a look at how to dig your way out of debt.

The Crushing Weight Of Debt

Carrying around a significant debt load can negatively impact your daily life and wreak havoc on your emotions. Physical and emotional manifestations can include any combination of anxiety, overeating, insomnia, lack of concentration, feelings of hopelessness, and so on.

I know all too well about how crushing debt can make you feel from firsthand experience. There was a time in my life when I had student loans, credit card debt, and car payments all at the same time. If that wasn’t enough, I also had a low-paying job. I was literally working just to pay my bills and put gas in the tank.

To say I felt hopeless when it came to my money was an understatement. Fortunately, I was able to eventually get a better paying job and make a plan to pay off my debts. It wasn’t easy, but little by little, year after year, I paid down my balances and watched my debt fade into nothingness.

Then, life happened, thanks to a not-so-great relationship I found myself unexpectedly moving out on my own and repeating the debt cycle. This time though, it was to keep my sanity and to stay afloat, not because I wanted a fancy vacation or new boots. If you’re interested in that mess of a story, check it out here!

The point is, I’ve been there. Twice, I’ve experienced the crushing weight of debt and the subsequent elation when it’s eliminated. And I know the feeling of hopelessness that grips someone deep in debt. To get a handle on it, you must do a few things.

Know Your Load

The first thing you need to do is face your debt load. You can’t exactly start tackling your debts if you’re not even sure how much you owe and who you owe it to. After you have this vital number, you need to make a list of all of your debts to prioritize repayment.

Be sure to include:

• Balances
• Interest rates
• Terms of repayment

How To Dig Your Way Out Of Debt

If you’re not sure what your credit score is, I highly recommend you do a little digging to find out. Your credit/FICO score affects the rates you are eligible for when you borrow money or try to negotiate better terms on existing loans and credit cards.

Needless to say, a higher score means you get lower interest rates on borrowed money. And that equals BIG savings over the course of a lifetime.

You can quickly find your score by using Experian, one of the most trusted credit score agencies around. Not only will you be able to see your number, you’ll also be able to see if there are any discrepancies in your report.  Tracking your credit score is just as important as tracking your net worth, something we’ll talk about a little later in the post.

For now, let’s get into the nitty-gritty of how you can start digging your way out of debt – TODAY.

1. Change Your Outlook: Changing your outlook is vital to breaking the debt cycle. After all, if you work hard to pay off all your debts but you still don’t see anything wrong with financing your next trip to the Caribbean with a credit card, you’re going to find yourself in the same financial mess before you know it.

2. Trim Your Expenses: Trimming your everyday expenses will allow you to free up some cash, fast. As soon as you free up some cash, you’ll need to redirect it towards debt repayment if you’re serious about eliminating your debts.

3. Sell Your Stuff: If you’re like most people, you have plenty of stuff sitting around your house or apartment that could be sold for a tidy sum. So, sell it. Online sites like Craigslist and the FB Marketplace make selling anything from clothes to a car a cinch.

4. Make More Money: If you’re already living on a bare bones budget and don’t have any money left over at the end of each month to pay extra toward your debts, it’s time to start thinking about getting a promotion or picking up a side hustle.

Getting promoted might be the easier route, as long as you deserve it. Make a convincing case to your boss with facts to back up your claims and you’ll be smiling all the way to the bank.

If for whatever reason, a promotion isn’t in the cards, your best option for making more money is to tackle a side hustle. Side hustles range from delivering pizzas to driving for Uber to taking online surveys. With so many options, you can surely find something to fit your lifestyle and personality.

5. Create A Solid Plan: Creating a solid plan means evaluating your debt situation and creating a realistic plan based on your finances.

First, determine how much you can reasonably afford to devote to debt repayment each month. Next, calculate how long it will take for you to pay each debt in full. Then, stick to it! You might even consider making a progress chart to keep you motivated along the way.

Two popular methods for eliminating debt are the Debt Avalanche and the Debt Snowball.

6. Track Your Net Worth: Another way (and in my opinion, the best way) to stay motivated during debt elimination is to track your net worth. We started tracking ours when we got serious about our money.

The calculation is simple, you subtract your liabilities from your assets. The difference is your net worth. The best part is that net worth goes UP whether you’re investing in the markets or eliminating debts. If you want to start tracking yours, I highly recommend the easy and free app, Personal Capital. It’s what we use and we couldn’t be happier with their free tools, calculators, and services.

Other articles you might enjoy:

• F.I.O.R. – Financial Independence Optional Retirement
• 9 Money Hacks That Took Us From The Poorhouse To The Penthouse
• 7 Quick Side Hustles Busy Parents Can Start This Weekend
• 18 Ways To Boost Your Income And Make More Money
• 15 Clever Ways You Can Make $100 Cash In Under A Week
• Why We Include Our Home’s Value In Our Net Worth
• Living A Debt-Free Lifestyle: An Expert Roundup

Breaking The Debt Cycle

Breaking the debt cycle means not only paying down your current debts, but it also means changing your mindset to avoid getting back into the same trouble in the future.

You should also be asking yourself, how many credit cards should I have? It’s important to keep a tight lock on your finances before you make any big decisions, and having too many credit cards could easily overwhelm you and encourage spending on non-essential items. It’s important to know yourself and your relationship with money and debt, especially when it comes to credit cards. Try to keep your financial life manageable and never try to live above your means. Doing so could lead to a financial mess.

By making your finances a priority, you’ll be in a much better position to create wealth and live your best life yet!

Do you have crushing debt? If so, what are some of the steps you’re taking to dig your way out?