Editor’s Note: When I heard that my friends Gina and Josh Masters had recently paid off $66,000 in debt and had made a list of the 33 lifestyle changes they had incorporated to accomplish it, I asked if I could use it as a guest post to teach others how to get out of debt. They humbly agreed. And this is the result:
“Live like no one else now… so that you can live like no one else later!” – Dave Ramsey
Three years ago, my husband and I found ourselves drowning in debt – $80,000.00 to be exact (and that’s not even counting the mortgage). Around that time, coincidentally, our church began offering a financial program called Dave Ramsey’s Financial Peace University. We spent the last $100 from that pay period to sign up. And the rest, they say, is history (or at least, most of our debt is now history).
As I write this, over the past three years, we have paid off $66,000.00 in personal debt. No magic, no quick fixes, no debt consolidation, or bankruptcy filing. Just persistent sacrifice. We have saved ourselves from financial destitution by making a number of simple, small changes in our lives that led to us getting out of debt.
Recently, my husband and I sat down to make a list of every change we had made hoping that it would encourage others. When we finished, we reviewed the list and were surprised at how simple it looked. Yet, all of these ideas—put into practice over a period of time—have nearly completely got us out of debt.
They are tried and true. And best of all, simple enough for anyone.
33 Proven Ideas to Getting Out of Debt:
- Re-shop auto, home, and life insurance to see if you can bring down your payments.
- Downgrade your home television package/services, or get rid of it entirely.
- Disconnect your home phone (for sure). And double-check the rate on your cell plan for a better deal if it’s been awhile since you checked.
- Buy and sell clothes at your local consignment or shop at Goodwill.
- Have a massive garage sale. (If you’d rather be out of debt than have an item, choose to sell it to help you get you there.)
- Advertise higher quality items on Craigslist, Facebook, or your local newspaper to get better prices.
- Focus on buying mostly sale items at grocery store or generic brands to reduce your cost.
- Use a grocery store awards program to earn money off gas.
- Cancel unnecessary expenses like magazine subscriptions, newspapers, manicures, pedicures etc. Anything that could be considered a “want” instead of a “need” should go until you are out of debt or greatly decrease your debt.
- Go to the matinee movies instead of paying full price (and skip the concessions).
- Or better yet, use at-home movie entertainment.
- Get temporary work or seasonal part time work to boost your income.
- Read books from the library.
- Buy your most expensive groceries in bulk at Costco: meats, breads, cheese, produce, paper products. Establish a monthly grocery budget for the additional needs at regular grocery stores.
- When eating out, skip the soft drinks and stick with water. Skip the extras too (dessert, etc.).
- When eating out, share a large entrée or have small appetizers instead of the costly meal.
- Plan your errands more efficiently to conserve gas.
- Find friends that you can trade services with…hair-cutting, handyman, photography, babysitting, pet-sitting.
- Give home-made gifts, baked goods, or service IOU’s rather than expensive presents.
- Boxed cereals are expensive; switch to oatmeal, eggs or fruit for more nutritional and financial bang.
- Call the utility companies and get on a budget plan to give you more consistency with expenses each month.
- Set a spending limit with family at Christmas and/or draw names.
- Use exercise videos, walking or hiking instead of paying for the gym.
- If your haircut is too expensive, find a less expensive stylist or see if your hairdresser will cut you a break on price temporarily—ours did.
- Say “no” to hosting and/or attending in-home parties where you feel pressure to purchase.
- Does your family live nearby? Once a week dinners with mom or dad saved us a meal out of our shopping budget. Additionally, it usually led to leftovers and our parents looked forward to our visit each week.
- Make your coffee at home instead of buying it each day.
- Pack your lunch—not once a week, but regularly.
- Make extra dinner servings on purpose to have leftovers for lunch.
- Our dentist advised us we could skip the fluoride treatments if we were using a daily dental rinse—which we did… and bought on sale.
- Program your thermostat for savings on heating/cooling when you’re not at home.
- Tempted by certain retail stores? While digging out of debt, avoid window shopping these places where you’ve failed to control your impulses before.
- Give**.
Many may say, “What? I need my manicure!” or “My kids will only eat box cereals!” But trust me. If you are serious about getting out of debt and changing your life, the only thing you need is a roof over your head, clothes on your back and gas to get to work to bust your way out of this.
Plus, take comfort in knowing that you don’t need to eliminate these things forever. Personally, I look forward to hiring back our housekeeper and treating myself to a few pedicures next summer. But until we are debt-free and have a fully-funded emergency fund, we’ll be focusing on using the dollars we bring into our home to set us up for a lifetime of success.
**Many wonder about Number 33 (Give) because it seems counter-intuitive to most of us. One thing we never stopped doing – even in the worst of times—was giving. We always gave money to our church, our favorite charities, and foundations that we believe in. It’s easy to say “I can’t give. It’s not in my budget.”
But if we’re looking for a lifetime of success and influence—not just the latest gadget or status symbol—how can we afford not to give? Giving reminds us that we can live for a purpose greater than this world and all the temporary treasures it offers.
It helps keep everything else in perspective. So pick and choose from our list above – do one or two or everything on the list to get yourself out of debt – but don’t leave out number 33. We can attest from firsthand experience, it will radically transform your life!
Image: The Cleveland Kid
Kori says
Just wanted to say since it was already mentioned in the article… Dave Ramsey recently did a sermon series at my church (like a shortened FPU class over 5 weeks) and they are free to watch online in the archives or you can purchase them to keep. http://www.gatewaypeople.com
It explains everything in detail for those who are still hesitant about what this article is trying to convey.
I enjoyed the article, thanks for posting!
cyndy says
#34 Listen to jazz, makes you feel rich
genniemom says
I don’t know if it’s already been said, but I must reiterate the ‘give.’ My family is in true financial hardship. We are on welfare and have been trying to climb out of it for years. I frequently volunteer at my church and other charities, and we donate what money we can. Giving truly does give back. Volunteering is a form of entertainment that doesn’t cost me anything. Plus, when I help people, they want to help me. I have made so many new friends, and with them comes an ever expanding network of skills and things to borrow and share. We share children’s clothes and offer each other services, the most obvious being babysitting. I feel so much more fulfilled with the addition of more friends in my life, along with a reduction in material clutter.
Rainy says
I have also sold so much unwanted stuff on craigslist and ebay I am on page 6 of craigslist of selling stuff we don’t need.
Cindy B says
We do most everything on our list but still struggling with debt. Over the years our medical expenses have skyrocketed and health insurance covers less and less. I’m now considering selling one of our cars and just walking/biking. My kids schools are walking distance, and the grocery store isn’t too far. At the very least I would get a good workout.
Christina says
Cindy, that is my response exactly. And oh- this is with health insurance. The constant charging of co-pays, increase in deductibles, etc. is breaking my family. Our wages are not keeping up with anything. I can minimize every expense, but I can’t keep up with these outrageous healthcare charges, especially since my husband has not seen a cola. As to working additional hours or another job: People are already working like crazy. I have a child. Am I supposed to take her along? Or never see her? I already work 40 hours plus commute.
Natasha says
I so understand you! So true..
Rainy says
Just buying food, toiletries and household products all on sale with coupons and bonus dollars from stores I saved 15,000 in one year. I had free paper bounty towels and scott’s toilet papers for two years. I had 56 bottles of ice tea for free. I now make my own lemonade it’s cheaper. We have olny the mortgage and car and working on paying them down. Buy kids clothes for the next season at the end of the season and I buy and sell my kids clothes sometimes on ebay. I get the nicer j crew and hannaanderson on ebay.
Sarah says
What are the best coupon sites? Thanks!
Joyce says
Southernsavers.com is awesome, also, hip2save.com. southern sa ers lists different grocery stores, along with sales and corresponding coupons to print out. The best way to save is to use coupons with a buy one get one free sale. This will reduce your price per items drastically. I save about 50 percent or more on grocery shopping this way. Good luck!
Sarah says
My husband and I do almost all the tips above, and not because we are in debt. We are planning on retiring (or at least to part-time) in 10-12 years, when we are about 40. We are saving for a house. We are saving for our unborn children’s college educations. We are saving for retirement. We know the future is expensive, so we try to keep the present cheap.
Some other tips:
1) We had two cars. We sold the one that was more expensive to maintain and which would sell for a higher price.
2) Based on historical market returns, consider that every dollar you save when you’re 20 is worth about $18 by age 65, and every dollar you save when you’re 30 is worth about $10. These numbers have been adjusted for inflation.
3) As the article said, sell your stuff at consignment stores, garage sales, etc. I use Craigslist mostly and have also sold some scrap gold to my local jeweler. Over the past 6 years I have sold $7,700 worth of stuff. I sold most of these items in my early 20s, so by age 65 this money will be $138,600! Or closer to age 30, that’s still $77,000 saved for retirement! For the curious: I sold my car ($6,000), KitchenAid mixer ($130), sheepskin slippers ($30), watch ($50), television ($100), laptop ($100), designer handbag ($450), leather-bound journal ($10), blender ($15), toaster over ($30), tungsten ring ($80), wireless router ($10), another designer handbag ($50), memory foam mattress pad ($30), crock pot ($30), apple TV ($60), two other small TVs ($140), graphing calculator ($65), scrap gold ($350). I have found that brand name goods in good condition sell the best.
Sarah says
By selling our excess stuff, we were able to move into a 700-sq ft studio. We’re saving $500/mo on rent — $6,000 a year!
Christina says
Don’t want to be Debbie downer: But you might want to have no children if you plan to retire young. Honestly, I don’t see how anyone can accomplish that. If your kids have any kind of health issues, good luck. If you have any, more good luck. This is not a country that has family friendly policies. So make sure you plan for that. Healthcare costs will eat you alive. And that is with good insurance, which by the way: How do you suppose you will have good insurance for your kids when you retire at 40? Playing devil’s advocate here.
Natasha says
Christina, I think you are right on, and not a devil’s advocate. We have three kids and trips to emergency room (yes – at least one or two per year), added up to $6k in costs that our insurance did not cover. Giving birth alone will cost about $4k nowadays. THat is if everything is easy with pregnancy and delivery.
We moved to Canada. It is a good feeling not to have to think if i should take the kids to urgent care or emergency room, or treat the issue yourself, and it is shocking when the emergency room visit only costs you $4 for parking.
Sarah says
We are planning on having two children. We already have $6,500 saved for their educations. We both have jobs that provide health benefits to part-time employees.
Kevin W says
Try bike commuting, my family saves ~$5,000 per year because we eliminated a car & I ride to work & short errands. There are lots of pluses besides the $ but one of my favorites is that I get 2 20 minute workouts daily.
Alison says
Keep in mind that a family who is in debt, say $20,000, (not considering their mortgage), who only makes $30K a year probably follow most of these tips and still has debt. I know we fall into this category.
When we took a major pay cut ($25K) a couple years ago we had to make significant changes. We canceled subscriptions, got rid of the $135 cable/land line/internet bill and not get Netflix and Hulu for $15 a month and reduced our internet costs. We are regularly found shopping for clothes at the second-hand store. Kids’ clothes are $1-2 a piece and we’ve found wealthy people who spend a ton of money on clothes donate, so the quality is high! We only go to the library for reading material. Not to mention a trip to the library with our 3 kids is a big outing for them..and it’s free. They don’t know that other kids go frequently to the children’s museum, bounce house arena, etc. Those can be very costly. Fortunately for us we are only two months away from paying off our car. No car payments are a huge plus!
Our biggest struggles with a lower income is in the case where the van needs repair, the water heater has to be replaced, and the cat needs to go to the vet all in the same month. Saving on the things I listed above still doesn’t give us a chance to save up $1500 a month for these out-of-the-blue expenses and chip away at the credit card debt at the same time.
We live on less because we HAVE to. Some friends ask me how we manage and still look put-together. We make wise choices. We eat at home 99% of the time, we have family babysit, pedicures were given up a long time ago, and our home is affordable. We may have debt that weighs on our mind, but at least we are aware of it. I just want to see the end of the tunnel. At this point, I still don’t.
Christina says
Wages have not kept up with costs of living. With a degree, you still have no chance covering those expenses, plus you have student loan debt. I like this site about living minimalist in many ways. However, it is time that we don’t just talk about personal responsibility. Let’s talk about systemic injustice. If all of us act as if downsizing and buying at goodwill will solve the increasing wage gap, we are doing nothing. There needs to be a balance. Personal change, and fighting for the middle class. I don’t want to feel that my financial issues are just due to me being silly and irresponsible. It is not. Mine are due to going to college, and having to deal with health issues. I don’t live in a big house. My power bill is small. I cook from scratch. I still can almost not make it. Something is wrong, and we need to fight for change in big ways, and support each other.
Meridith says
YES.
AlethaFaye says
So TRUE! I’m in the same situation almost exactly …
Robyn says
Right there with you! 2 kids.. tiny house… college educated. Paycheck to paycheck… and here’s the kicker: I’ve done pretty much all of these things. For YEARS. then we have a good month or two and pay off some debt (credit card, student loan etc) and SLAM the next month unexpected expense. liiiike: it’s an old house, so appliances, or heating. Old vehicles led to constant need for expensive $800-$1000 repairs, pets to the vet (I know, this one IS our fault for having pets), medical bills ( even WITH the super-fancy/expensive insurance plan)…. it IS NOT easy. And from it comes anxiety, and a feeling of inadquecy… and I don’t see a light at the end of the tunnel. period. Maybe when circumstances are different, like when the kids go to school, or when Hubby makes more, or when I go back to work… but currently, it isn’t in the cards and feeling deprived for years and years really wears on you.
Cheryl says
If you are in a position to do so, you can also rent rooms in your house or convert unused space like a basement or attic or room above your garage into an apartment or studio to rent. You can do this on a year round basis or short term basis for people wanting to cut corners while traveling. You can list the space for free on craigslist or sublet.com or on airbnb for a commission. I have been doing this for years and also rent out my house while I am traveling which pays for my trip. If you like to travel and have a special skill or area of expertise, you can put together a workshop to offer cruiselines and get yourself free or reduced accommodations.