4 Questions To Ask Yourself When Paying Down Debt

Trying to get out of debt but need a plan? I got you Latina with these four easy questions. 

I first acquired debt when I was 19. Between student loans and needing a new car, a monthly debt payment quickly became my new reality.

Fast forward many years later (hey, I’m old but not THAT old), I’m still paying down my debt. Going back to school, multiple operations and another new car means I’m still in debt, unfortunately. However, I refuse to think of myself or my debt as bad, because it helped me when I needed assistance. My student loans have allowed me to earn a bachelor’s degree that has tripled my income. I needed surgery for my cancer treatment, now I’m cancer-free. And a new car after driving the same one for the past 10 years means I now have reliable transportation.

With all that being said, I’ve been following a simple plan to pay back my debt based on the questions below. The less brain power I’m exerting in any area of my life means the more energy I have to pursue projects and self-care. My life has definitely been a lot easier thanks to having a plan in place. I hope the questions below can help you too!

Why should you pay down your debt?

Debt is a time and money suck. Yeah, I said it. I know I have debt and it doesn’t make me a bad person, but I’m going to call it as I see it. Every month when I put $1,000 towards my debt, I get a little sad.

I’m at the point in my life where I’m trying to figure out enough income streams so I’m not worried about working full time. I have a lot of autoimmune disorders that make crawling out of bed hard sometimes. I’m also dreaming about owning a ranch home or bungalow, for me and the cat. That $1,000 could go towards some of these goals so yeah, it does sting a bit.

Besides being a money suck, it takes mental capacity to keep track of your debt. And if you’re behind on your payments? You better be good at screening your calls. (I’ve been here a few times so I know how truly shitty it feels) With all of this being said, you can see why it’s important to kick debt to the curb!

Question 1: How Much Do You Owe?

Before you get overwhelmed with your adding up your debt, take time to put on some comfy pants and grab a glass of wine. Now that you’re settled, start adding up all debts you have. What’s considered a debt?

  • Car loans
  • Credit cards
  • Student loans
  • Medical bills
  • Collection notices from overdue or closed accounts.
  • Loans from family and friends.
  • 401 K Loans
  • Anyone else you rightfully owe money to.

For me, I have a mix from a few of the above, including a car note, student loans and a credit card I’ve used to help with some medical expenses. I also have a few medical bills leftover from my gallbladder surgery last year and some dental work I recently finished.

Once you’ve gathered all information, create a spreadsheet in Google Docs or MS Excel so you can enter the following information:

  • Creditor
  • Type of debt
  • Reason debt occurred
  • Amount currently owed
  • Payment amount if arrangement has been made
  • Due date
  • Interest rate

For for example, let’s take a look at my hypothetical car loan:

Creditor: Ally Financial

Debt: Auto loan

Reason: 2018 Mustang (I don’t drive a mustang but you get it)

Amount Owed: $16,542

Payment arrangement: $350 per month

Due date: 15th of every month until loan is paid in full.

Interest rate: 5%

With a spreadsheet organized like this, I’m able to see exactly how much I owe and to who. I can also see, with interest rates and due dates, what may be the priority when focusing on future debt repayment. I know a lot of people may disagree but I am a firm believer in always paying back people you know first, despite it not have an interest rate. A lot of relationships end because of money and this is something that can be avoided with clear communication and expectations.

I’ve had to borrow money before and it hurt my dignity to even ask since I felt at the time I shouldn’t need to “ask” for help. As someone who has been scrappy since high school, it’s hard to admit that you don’t have it figured out all of the time but hey, shit happens. Make an arrangement, stay in good standing and once the loan has been finished, write a heartfelt note of how much their gift helped you out.

Question 2: What’s Your Method Aka Plan For Paying Down Your Debt?

After you’ve calculated how much you owe, you need to come up with a plan to pay it down. There are two famous debt repayment methods that I would like to share with you today, the snowball method and the avalanche method.

The snowball method, made famous by Dave Ramsay, is when you make a minimum payment on all of your debt, then throw extra money at the smallest amount. By making an effort to pay the smallest debt off first, you are going to see one less line item in your debt payment plan faster than you would if you had spread out extra money among all of your debts. When you see one less line item, you get excited then move on to the next smallest debt to keep the “snowball” rolling.

The debt avalanche method, made popular by Harlan Landes during his Consumerism Commentary days, is when after you make your minimum debt repayment,  you put any extra money towards the debt with the highest interest rate, despite the debt amount.

Interest can be a real money suck so by paying down your debt according to the highest interest rate, you realistically save the most money.

Now, which one is for you? That’s really up to you to decide but I suggest the method that will keep you motivated. Debt is a marathon, not a sprint. Just like any other marathon, you need continuous motivation and focus. Some people are motivated by paying down their debt in a snowball and some are motivated by owing the least amount of interest possible.

I do a mixture of both at the moment. Right now, my focus is to pay off a dental procedure I had completed last month. It’s not the smallest debt I owe nor is it  the one with the highest interest rate, but I plan on getting more work done soon. With that in mind, I want to free up that line of credit.

Question 3: How Much Can You Put Towards Your Debt?

The number way one way to become discouraged in life is to set yourself up for failure. Trust me, I know. As an overachiever and chronic goal setter, I have some lofty ambitions in my life. But you know what I fail to do when setting up my goals? I fail to be realistic about my circumstances.

When starting out on your debt repayment journey, you need to be realistic about how much you can put towards your debt each month. The worst thing you can do is give yourself a date of being debt free in a year when you owe thousands and only bring home hundreds. Catch my drift?

Make a budget and see what you’re working with after all expenses are paid for. I like to divide my budget  into fixed and unfixed expenses. Fixed expenses are something I know will never change, such as rent. Unfixed expenses are things I have more control over, like groceries. By making a budget and assessing your spending, it’s easy to see what can go in order to make room for that debt snowball. (I’m looking at you eyelash extensions.)

Be realistic with your spending and what you can cut. Again, don’t set yourself up for failure. Don’t give yourself $50 a month for groceries because you know you aren’t going to eat ramen everyday. Same goes with allowing yourself a buffer of a few hundred dollars, because stuff is going to happen. I guarantee it.

Question 4: How Can You Earn More To Put Towards Debt?

The last question I want you to ask yourself is how can you pay more towards your debt. I know, I said earlier debt was a time and energy suck. It is. But once you start feeling better of your financial situation, you realize you’re in control. When you are in control, it feels great. And you want to keep feeling great.

I am a firm believer of earning more. You can only cut so much from your budget before you run out of stuff to cut. You can’t save what you don’t earn or in this case, use it to pay off debt! Some ways you can more money?

  • Sell stuff on ebay- My friend Jason does a phenomenal job walking you through becoming a high seller on eBay in his course.
  • Write e-books- If you are a random pool of knowledge, writing e-books may be right up your alley. One of my other friends Michelle from Michelle Is Money Hungry has a course that helps you finally get all that knowledge on to paper so you can get paid. Check that out here.
  • Walk dogs- A fun way to earn cash and get in shape is by signing up for a website like People are always looking for pet sitters and they make pretty good money too!
  • Take surveys- If you have a few minutes here or there, like waiting in line at the grocery store, be productive and take a survey. Websites like Swag Bucks and Inbox Dollars are cool ways to earn cash while killing time unlike Facebook.
  • New skills- I’m a firm believer in expanding your skill set, especially in an ever changing economy. A few years ago I decided to work on a few new skills, such as freelance writing and virtual assistant work. I then pitched myself to a few other bloggers and overtime, I’ve been able to build my own business! Consider learning a new skill such as freelance writing or making crafts and beauty products to sell. You can always learn a new skill and once you do, it’s really empowering.

By clearing up your debt, it’s easier to have more wiggle room in your budget and more energy to things that bring you joy. I hope the tips I’ve shared above can help you do just that.

Being in debt is such a major time and money suck. I should know, I've totally been there. Ask yourself these four easy questions to help kick durb to the curb, once and for all. | debt | debt free | get out of debt |


3 Ways To Declutter In The New Year

While I’ve been working on decluttering and spending consistently less since starting my PF journey, I don’t think I’ve really thought about the consumerism part of it until last year. I was a wasting a lot of  food and in return, money. Since I was decluttering my kitchen, I decided to take a look around and see what else needed some sprucing up.

In doing this, I realized how much crap I had laying around my 600 sq ft apartment. Yes, I do regularly declutter and drop stuff off at Goodwill. I’m always consistently  finding items to give away. But somehow, my stuff still feels like it’s multiplying. So this year, I’ve decided to be a lot more mindful and see how I can conquer my clutter once and for all. Today, I’m sharing three ways that you can help beat the clutter too!

The KonMari Method

Last fall, I had the chance to read the book by Marie Kondo called “The Life Changing Magic Of Tidying Up.” Yes, I have been living under a rock and also yes, I can receive mail here. All jokes aside, I’m glad I was able to finally read the book before her television show dropped on Netflix, because I was able to enjoy it from another point of view. Mainly, looking at the results instead of questioning her process.

Kondo breaks down organizing into steps known as the KonMari method. By dividing your home into different item categories (not areas), you’re then able to pick items up one by one and ask yourself if they spark joy. If the answer if yes, you can find a new home for it. If the answer is no, it’s time to part with it. By starting with clothes, you should able to deal with the harder stuff such as mementos and photos last.

While not all items spark joy in my home (and I don’t think all items truly do as much as they serve a purpose), I really like the fact that Kondo helps people see that stuff carries an emotional attachment. For instance, she talks about presents. I know a lot of people (myself included!) tend to hold onto items because they were gifts instead of using them or (shocker!) get rid of them. How many times have you heard someone say “Oh I couldn’t do that, it’s a gift.”

Stuff that also has an emotional attachment, such as belongings of a loved one who’s passed on, are especially hard to part with. I know this first hand as I carried my mom’s belongings from house to house starting when I was 21. It wasn’t until I was 27 that it truly felt “okay” to let her things go to a new home. I appreciate this method acknowledging how hard it is and being able to give tips to process the grief associated.


The Minimalist Game

The Minimalist Game, created by the Minimalists duo Joshua Fields Millburn and Ryan Nicodemus, seems easy enough . For everyday of the challenge, you get rid the same amount of items from your home. So for day one, you part with one item. Day two, two items. This continues on until you get to day 30 and have successfully gotten rid of 465 items in your home.

I played this game last November and I barely got through my living room and Christmas decorations. It was so mind blowing to me that I had barely scratched the surface in my home and didn’t make a dent in my “things.” It’s estimated that the average home has over 300,000 items in it and I wasn’t a believer until I participated in this challenge myself. Even looking around my living room at this very moment, I see more things I can get rid of!

The Minimalists also have a podcast, books and a film along with their website. After playing this game, I’ve really become a fan. They talk ways to be a minimalist in all areas of your life and not just your physical space, which is what I really like. Last December, listening to their podcast was a real help when going through an extremely stressful time in my life. I’ll now associate the Minimalists with getting me through hard times just like I do with books by Stephen King.

Project 3000

Project 3000, coined by The Tidy Life Project’s Claire Bernie, is a challenge to get rid of 3,000 items in your home. Yup, 3,000 items. I know, my jaw fell on the floor when I first saw that too but after completing the Minimalist game described up above, I knew that was going to be my project in 2019.

What I love about this project is that it has a huge community on Instagram (Do you follow me yet?). So many people are striving to become minimalists but it may not feel like it if you just look around at people in your personal life. For instance, I know a few people who are pretty much minimalists but those people are ones I’ve met through blogging. The majority of people in my everyday life I interact with are definitely not minimalists.

Again, the average home has over 300,000 items in it so 3,000 is hardly a drop in the bucket if you think about it. Thinking about how much paper I have alone along with all the junk in my closet is really motivating me to participate in Project 3000 for my own home. At first, I was trying to have place way too many stipulations on myself but I decided if it’s leaving my house, it’s getting counted (with the exception of regular trash).

There you have it. Three ways to declutter your home in the new year and maybe even use for spring cleaning! Have you tried any of these methods? I’d love to know!