5 Tips For Breaking Down Debt (The Dave Ramsey Way)

5 Tips For Breaking Down Debt (The Dave Ramsey Way)

Debt is one thing in this life that continuously wears on us. That’s why it’s important to get out of debt as fast as you can without looking back. Dave Ramsey is a guru in the debt slicing world. He has great tips that I’ve been able to take and apply them to my own life. While he has a great plan in place, sometimes you have to customize the plan to fit your needs.

#1. Budget

It amazes me how many households in America do not have a budget. Instead of paying bills first, people are using their money on going out to eat and for fun. Creating a budget gives you financial freedom in so many ways. You are telling your money where to go. This is one way to slice debt because you are able to put your money where it goes, while also applying leftover money to debt. If you have no leftover money (after paying bills), you are at least putting it in the right places. 

#2. Rolling with It

When it comes to paying off debt, you are going to have some really good months and some incredibly bad months. Snowballing can be difficult, but in my opinion this is one of the best tips Dave Ramsey has. He tells you to snowball your debt from smallest to largest. It sort of gives you the oomph you need to go ahead and get debt paid off. If you have been saving money for a rainy day, this is the perfect opportunity to put it towards debt that is just accumulating you interest. 

#3. Support

I’ve noticed that people pay off debt faster when they have the support they need. If you don’t have the proper support in real life, consider joining a group on Facebook. Search for Dave Ramsey Debt groups and click to join. There are some hard core debt payers out there and you are bound to find some in these groups. Of course, joining Financial Peace University will also help you come in contact with those who support you. 

#4. Pace Yourself

Paying off debt is exhilarating; you are so close to being free. I would recommend pacing yourself. Set small goals and meet those goals head on, one at a time. You are more likely to pay off debt when you are not burnt out from it. 

#5. Don’t Accumulate More Debt

I think one of the biggest mistakes people make when they are paying off debt is that they justify new debt. Accumulating more debt will not help you reach the ultimate debt free status. You must also understand that life happens, but we must also be prepared. Having an emergency fund in place is important because it’s a matter of when you will need it, not IF you will need it. Americans are so used to relying on credit to buy things they want now, so they can pay letter. If you want out of debt, you have to change your way of thinking. 

The amount of debt you are in doesn’t matter, getting out of debt is what matters. I say do what it takes now. Dave Ramsey says “live like no one else now, so you can live like no one else later.” While your friends and family might mock your frugal efforts now, you are only headed towards bigger and better things (by paying with cash of course).