15 years ago my husband and I were serious budgeters. We still budget today but in a different way. We used to budget so we could even afford basic necessities and now we budget to plan vacations and our son’s College fund. We worked very hard and with some fortunate career moves, tax returns and learning how to move money, we paid off all access debt. We own all of our cars, have over half of our mortgage paid off and are sitting on a lot of equity. We have helped put one son through College with one more on the way to College in a few years so that fund is already growing for him. If you are drowning or feel lost with where to start tackling your debt, I am happy to share how we got started back then.

The most important tip I can offer you is to get committed. You need to understand each debt. You need to learn who you owe to, exactly how much, if there are penalties for paying off early, know your interest rates and if those rates are fixed or can change. If you are in debt, chances are credit companies know this and you have been sent a lot of offers promising you a positive change. Pay attention to some of these. You know the main credit companies so see how each work and whether they could be a fit for you. What does this look like?

You may see an offer that asks you to consolidate all of your debt into one account. This may seem hassle free, but there is a cost. Calculate that cost. Read on how much they charge for balance transfers, how much interest they will charge you, will the companies you owe penalize you to move their loan, etc.. There may be fees, but the lowest fee wins, right? Compare the difference on how much extra consolidating could save you – or cost you. Maybe you just have a few large loans and individually tackling them one at a time is your money-saver. Or maybe you have so many little loans at various rates, consolidating pays you. You need to sit down and lay out all of your options.

We did a little of both. The year we started tackling our debt, we took our tax return and paid off a little student loan I had left. It was over $7,000 at 3.8% interest and I had been paying $150 each month towards it. There was no penalty to pay it off early and because it is a student loan, the interest was fixed and low so it made sense to get rid of this loan ASAP. No fancy trips, no new car with the tax return – we took every penny of that return and paid debt #1 off. It felt so good and now we had an extra $150 a month and it was time to sit down again and re-budget that $150. I told you that you have to stay committed and dive in. You have to go without and travel less and buy less for the reward.

That $7,000 return would have been a fun summer of travels with the boys back then, but we paid a debt instead. It was OK – we have traveled plenty since and we did it without debts so it pays off. One move like not paying off that loan could have sent us in an entirely new direction back then or perhaps we would have not acquired the motivation we did to keep budgeting this way.

Once we paid off that student loan, the offers came in fast and plentiful. One day an envelope came from a local credit company offering us $0 balance transfer fees, a very good interest rate because it came into an economic time we knew rates were falling, the rates were fixed and then a few loans told us they would forgive early pay off fees. This meant, we could move right then to consolidate and we did. All credit cards we had were molded into one payment and now we were saving over $300 a month making one payment instead of several small ones. What did we do with an extra $300 a month? Pay more towards our car loan and start a small savings. We would stash $100 a month away and $200 a month extra on the car. The next tax return, we paid our lowest car loan off. Then we used that monthly payment saved on the other car and began paying that one off while putting even more into savings a month. You can see how in time we came to a place where we were finally debt free. We also committed to buying nothing extra in this time or we would have never made it.

We paid off a loan, getting rid of a monthly payment. But, we took that old monthly payment and rolled it into another debt and put more into savings. With all of the money saved today + we make more in our careers, we have stocks and savings. We travel. We still have no car loans or credit card loans. The cards we do have are travel reward cards we pay off each month, so we do save traveling. It is like a big umbrella that keeps opening more and more until you are finally standing under it protected from any unfortunate money decisions of the past.

Can you imagine the feeling when you stack your funds just right and make that final payment? I have felt that and not too much beats the satisfaction. I have a College degree and have had great promotions at work and none of that compared to being debt free. Every sacrifice was worth it and we don’t miss any of it today. I came across a great Guide to Budgeting that will help you out. Learn more by visiting this guide. Stick with it! You can get out of debt if you get committed and create a plan.