How I Was Able to Pay Off My Debt that is 5x My Salary

Image from wallstreetsurvivor

Before my financial literacy journey, believe me when I say that I got a mountain of debt. See the number right there? I was able to generate a debt that is 5x my monthly salary. Ouch! That hurts right? With regards to debt, been there done that. I am not really squeaky clean and debt-free to begin with.

Perhaps you might ask, how were you able to accumulate the debt?

The answer really is very simple. In fact, incurring debt is relatively easy than paying it. My secret to having that much debt? Credit cardsssss.

And that’s plural. See the sssss right there. That’s my number of credit cards before. Well the credit cards are just but mediums. To be able to have debt, swipe it to your heart’s content. I was into fashion years before. Can you even believe that? I check fashion bloggers every single day.
Whenever I see a fashion trend, I always see to it to get my hands on it the soonest I can. Plus, the proliferation of online shops was surely a big hit for me. I was able to order online not only in the Philippines but also overseas. And oh gadgets! Not to forget those gadgets that are open for “easy” instalment with your credit card. Oh the temptation!

Then my credit card bills are coming. To my surprise what blew to my face are amounts that I can’t even pay off in a month. It felt like I was submerged in cold water. I can still remember how my hands tremble while I was standing not knowing what to do with it. Technically, I really can’t afford those. But, I only got myself to blame for all of it.

Suddenly I knew I have to make a change. This should not go on any further. From there, I vow to pay off my debts as soon as I can. Let me tell you it was never easy. Nobody said it was easy. It involves a lot of dedication and discipline.

Here’s how I did it.

Do not incur more debts

The first thing that needs to be done in order to pay my mountain of debt would be; to not incur more debts. It would be a fatal loop should I pay my debt then I will still have another debt coming. It would be an endless cycle so to say. In order for me to do this, it would be right to cut off the medium. Hence, take the credit cards out of your wallet and out of your system. Since I can’t terminate my credit cards yet because I still have balances, I literally cut my credit cards. With this, I cannot be able to use it no matter how much I want an item.

Devise payment methods

The proper way to do next would be of course to pay the debts. I examined my debts from the different credit cards and from there sort it from the smallest amount to the next. I also wrote down the minimum payments needed. There are varied strategies to pay off your debt. However, as for my case I wanted to tackle the smallest amounts first because such goals are considered small and I know I can be able to complete it in the soonest possible time. Considering that my salary is small as compared to my debt amounts, I see to it to pay the minimum amounts of the other credit cards. Then I leverage and put more value to the smallest credit. Once the smallest credit is paid in full then I called the credit card company to terminate my account. Then repeat process for the rest of the credit cards.

Do more to increase money

Since I know for a mere fact that my salary is miniature as compared to my debt, the next best thing to do would be to increase my cash inflow. That is why; I embrace some online jobs that are in line with my interest and expertise. The extra money I got is all directed to paying those debts.

Paying debts as I stated earlier requires dedication and discipline. It will never be easy. You might have to cringe on a few expenses in order to accommodate the debt. However, by the end of it all you can be able to feel accomplished. Plus, you would be one step closer to your financial freedom goal. If I can do it, I’m sure you can too.

P.S To those doing the 52 Week Money Challenge, it is Week 20 already! Did you deposit the next amount yet?

P.P.S Want to know more about investing, savings, stock market and more, check out my reference here. You can download free ebooks and resources too. 

P.P.P.S I am also sharing my stock market secrets and information via these resources.