Debt Relief: Reminders of What You Are Doing Right

This article is presented by Kelly Whalen, Consumerism Commentary staff writer.

Like many Americans my family has debt. We are working diligently to pay off our debt. We’ve slashed expenses, given up hobbies, and even become a one car family.

We have a plan. A timeline. We’re constantly working on creative ways to shave some money off our monthly expenses, to earn more by selling stuff we don’t need, or by taking on side work.

There are days, and sometimes weeks, when fighting this fight against debt is incredibly difficult. The timeline to being debt-free seems like it will last forever. I worry about a devastating financial emergency, and sock money away like crazy. Then I start to worry about cutting back too much, and we find some frugal way to have fun as a family.

Then there are days like today where I was adding up numbers in my head all day, and trying to figure out how I could make it all work. Knowing that the only way to make it work was to continue to work hard, and save, and pay down debt.

Here’s what we are doing right:

Automatically investing in my husband’s 401k: We get the full match. No use in throwing free money away.
Automatically saving for our emergency fund: It started tiny, with only 1% of our income from each paycheck, but I bump it up as we find expenses to cut.
Snowballing debt: We have a spreadsheet that orders all out debts from A-mortgage.
Upping the ante: We put 25% of our after tax (after 401k, after savings) income to our debt.
Expense Checkups: Every month or so I go through all our expenses and spending to see if there is anything we can cut. I usually find somewhere we can reduce something, even if it’s only $5/month, that’s an extra $60/year which gets us that much closer to our goal.
Holding Periods for Purchases: While we spend very little on anything other than food (from the grocery store-no eating out!), when we do need something or want something we use a “hold” period. Just like a store, we will hold that purchase for a day or two, and then decide.

I try to remind myself on the days when I am struggling emotionally that we are doing so much right. One of the most rewarding things is to see our debt decrease every month. We have a debt chart that hangs on the wall, and it’s so satisfying to mark off another block of that chart.

I’m sure we have area for improvement, what other methods would you suggest to pay off our debt faster? What worked for you to get out of debt, or keep yourself from getting in debt?

Updated August 29, 2011 and originally published January 21, 2010. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.

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About the author

Kelly is a mostly stay-at-home mom to four kids. You can more of her articles about personal finance at The Centsible Life. Also, you can follow Kelly on Twitter. View all articles by Kelly Whalen.