Out of College and in Debt
If you’re really serious about getting out of debt and pursuing your dreams, you have to get intentional about it.
Your soon-to-be successful career has started. A wonderful, thriving marriage awaits you in the future. Your own house, complete with a picket fence and a beautiful cocker spaniel, must be right around the corner.
Those things are awesome to dream about. But, at this point, for most fresh college graduates, they are nothing more than that — dreams. And the one thing that will get in the way of those dreams, more than anything else, is debt.
The average student loan payment is now more than $27,000. That’s just the average. Plus, you have car payments and credit card bills. You know how it goes.
That’s why, in the middle of dreaming about the future, it’s an excellent idea to sit down and plan for the right now. If you’re 22, what type of plan should you develop to get out of debt before you’re 25? Can you do it even sooner, or will you need a little more time?
If you’re really serious about getting out of debt and pursuing your dreams without that baggage, you have to get intentional about it. Thousands and thousands of 35 year olds are still paying off student loans because they weren’t serious about working on that debt before a spouse and kids came along.
Everybody’s situation is unique. But if you really want to kick your debt to the curb, here are a few tips that will help you gain some momentum.
Take a second job. I know what you’re thinking. Finding one job is hard enough for a new graduate, so how am I supposed to find a second one? But this second job isn’t a “career job” — it’s a money job. Your goal should be to make as much money as quickly as possible.
One Dave Ramsey fan made $1,500 a month delivering pizzas. After delivery bonuses and tips, he averaged $20 an hour! What about housesitting, baby sitting, mowing yards, or selling your unused stuff or crafts on eBay or Etsy? You’re only limited by your imagination here. And, remember, when you’re trying to get out of debt, nothing is “beneath you.”
Work the debt snowball. If you have multiple debts, the debt snowball is an awesome way to knock them out one by one. List out your debts, one by one, from smallest to largest. Don’t worry about interest rates.
Now, put as much money as you can toward the smallest debt while paying the minimum on the others. Once the smallest one is paid off, take all of the money you put toward it each month and add that to the minimum payment on the next smallest debt. Keep at this until you work your way through all of your debts.
Make a budget. Yeah, a budget. That thing you probably hate. But you’re not alone. A lot of people hate budgeting, and that’s probably why a lot of people are trapped in debt. A budget is really not that bad, I promise. It’s simply telling your money what to do. Each month, sit down and allocate every single penny that you’ll be making for that month. To paraphrase Luke 14:28, before you build a tower, make sure you count the costs.
Break your budget down into categories like rent, gas, electricity, phone, etc. And don’t forget to allocate a small portion for entertainment. Everybody needs a mental break every now and then. The budget will give you a better idea of where your money is going, which will allow you to work through that debt snowball faster.
Sell stuff. This one’s easy. Most of us have way too much stuff. Clothes, video games, DVDs, purses, maybe even an extra piece of furniture we don’t need. Throw some of that stuff you don’t use anymore on eBay or Craigslist.
Set up an online photo album with prices of each item. You can make pretty good money by just selling your unwanted junk. Then, put all of that money toward your debt snowball.
Get intense. The Bible has a lot to say about debt. Just read Proverbs. One of my favorite verses is Proverbs 6:5, which basically tells you not to loan money to friends. And, if you’re in debt, to get out of that mess quickly.
Get intense, like a gazelle who is being chased by a cheetah. Those cheetahs are the credit card companies who would love nothing more than to keep you in debt. If you get serious and passionate about getting out of debt, everything else will take care of itself. If you get serious and passionate about getting out of debt, everything else will take care of itself.
Stop going into debt. This seems like a no-brainer, but some people are trying to get out of debt while they are still making purchases on their credit cards. And some will go back into debt after working their way out of it. Why would you ever want to do that? Once you cut up the credit cards, stop applying for new ones! Changing your behavior will eventually set you up for a lifetime of financial success and ultimately change your family tree.
Bottom line: If you keep doing the same things you’ve been doing, you’ll keep getting the same things you’ve been getting. It’s easy to sit back and tell yourself, “I’ll get out of debt later, but not right now.” Then, when “later” actually gets here, you’ll tell yourself the same thing.
There’s no better time than right now. Don’t wait until you’re 35 to get serious about getting out of debt. The younger you are, the more of an impact becoming debt-free will have on your life in the long run.
Use these tips or come up with a few of your own. But, whatever you do, commit to getting out of debt, starting today.
Copyright 2013 Rachel Cruze. All rights reserved.
About the Author
Rachel Cruze is a seasoned communicator and presenter, who has been speaking to groups as large as 10,000 for nearly a decade. The daughter of Dave Ramsey, today she uses the knowledge and experiences from growing up in the Ramsey household to educate America’s students and young adults on the proper ways to handle money and stay out of debt. Her book, Smart Money Smart Kids, co-authored by her dad, will release in April 2014.