Every one of us that has struggled to do something has had that moment where we say, “That’s it, I’m sick of this. I’m finally going to do it.” And that applies even more so when we’re talking about a person that has finally hit their breaking point and is ready to get out of debt.
Janice writes in: “Mike, thank you so much for what you do here. I’ve been following the blog and I need to know your thoughts on how to get out of debt. My husband passed a few years ago and I was left with a lot of medical debt from that.
I’ve tried a lot of different options, but I just need to know what the first step is. What can I do to make myself feel like I’m making progress instead of going backwards?”
Janice, I’m so sorry about your husband passing and I’m sure that wasn’t easy. The first step we take when we want to accomplish anything is to secure ourselves to brace for the journey.
When you’re getting ready to go rock climbing you harness yourself in for safety. When you’re about to go for a road trip, you check the car has everything it needs and fasten your seat belt.
When we’re trying to get out of debt, we have to secure ourselves with a starter emergency fund. The amount of this will be different per household, but we usually recommend anywhere from $1,000 – $5,000.
Without a starter emergency fund in place, any setbacks you have will just slide you right back into debt instead of using the cash and you’ll have a different mindset about utilizing debt.
Now, of course before getting the emergency fund together, we have to make the budget and make sure there’s enough coming in and staying in after all minimum expenses are met so that we can even put together an emergency fund.
If it’s an income problem, there’s no easy way to say it; you either need a better job or a second (or third) job. When we’re deep in debt, we need to be intentional and focused.
I’m not saying you have to keep a second job forever or work a ton of overtime the rest of your life, but it is important that we get done what we need to.
Janice, I hope this helped. Let’s power through this and if you have any more questions, please feel free to write in.
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This article is not intended to be legal, financial, or tax advice. For help regarding your specific situation, please consult a local advisor.