Map It Out

Have you ever thought to yourself, man, I wish I had more money? I wish I had more time to pursue the things that I really want to do, but I just can’t seem to get ahead. I wish I didn’t live paycheck to paycheck. I wish I didn’t have to pay my student loans, or all this credit card debt. How come it seems like I’m always paying someone else money?

I have thought all of those things many times. In fact, I used to be buried in debt, $55,000 worth. I had no plan, and was 30 pounds overweight. Every night I would say those things. I would say, Tomorrow, I’m going to start working out. Tomorrow, I’m going to stop spending so much money. Tomorrow, my family is going to eat healthy. Tomorrow, I’m going to start working on my goals. Tomorrow…

Guess what? Tomorrow, is an excuse. I used to use it all the time. It got me nowhere. In fact, every day that I put off what my real desires and goals were, the worse I became. My health declined, my motivation and energy decreased, I became more and more passive and bitter. Maybe you don’t notice it about yourself, but I guarantee that it will happen to you too.

Pretty soon you get in such a funk that it’s hard to pull out of it. So, what are you going to do about living paycheck to paycheck, paying off credit cards, student loans, and other debt?

It might be so bad that it feels like a heavy weight on your shoulders, it might even be keeping you up at night. That’s no way to live life…running, stressed, and afraid.

If you want to start taking control of this area of your life, it’s simple. You need a plan.

Some might say,but I don’t feel the need to pay off my debt: That sounds like a lot of fun, but I want you to call me in 5 years and see how you are doing and if you have the same philosophy.

This blog is about a 12 step process (Mapping it out) for getting out of debt. I will be creating a more in depth comprehensive video course on how to act these steps out, but through these 12 steps you can begin to take control of your debt.

  1. You must do an audit of every credit card, loan, cash advance, late payment, overdue payment, scheduled payment. Everything must be accounted for. You need to know exactly where every dollar that you have is going, what your spending money on, and how much goes to each place. You can’t bury your head in the sand on this and hope it goes away. It won’t, not on its own, or you file bankruptcy, but even then student loans don’t go away, and possibly some other debts too.

  2. Find out how much money you have coming in. In other words, what is your household income? If you make $2500 a month and you spend $3200 month, then you have a problem. The problem is either, you are spending too much, or you need to find a way to make more money.

  3. Once you find out how much you are making and subtract it from how much you spend, the 3rd thing you need to do is save a chunk of money. Set it aside for a rainy day. Some people call this an emergency fund, some people call it an Oh crap fund! Whatever you want to name it is up to you, but you need to save it as soon as possible, and don’t spend it, unless it is an emergency or an, oh crap moment.

    • What classifies as an emergency – medical related, roof caves in, car breaks down, some other worst case scenario.

    • It is not used for ordering pizza, paying for a class, or buying a motorcycle or something else because it is a really good deal

  4. Stop spending money on stuff you don’t need. Try and simplify your life to the basic necessities. Food, clothes, shelter, gas to get to work, maintain your home, etc. This may mean that you need to do a little research on getting different insurance, cutting your cable, looking for a new cellphone provider, getting a different vehicle, not buying the newest gadgets all the time. The goal in this step is to cut expenses and create margin. Plan your meals better, so that you can save money. Use cash to buy food. If you go over the allotted amount, then you need to put something back. It is called being intentional. Most of these steps boil down to being vigilant disciplined and working hard. 85% of people will read this and do nothing. The other 15% are the ones who will look back in 5 years and say, wow! We are so glad we decided to pay off our debt, we can now afford to do whatever we want.
  1. Create a Budget. Use the 360ManProject Budgeting forms. This budget is what you will use to monitor where your money should be going. It might need some tweaking every month, but it is an excellent start.

  2. Some finacial advisors tell you to stop paying into your 401k or other retirement savings until your debt is paid off. I will not tell you that. What I have done is give at least the 401k match amount. If your employer offers you a 401k and they will match up to 3% on the first 6%, then you should put in 6% so that you get the match. Pretty simple. If you have no consumer debt then I suggest that you start putting in at least 12-15% of your gross into your 401k. If you don't have a retirement savings, or 401k, then I would suggest that you look into getting one. My reccommendations are:

    • Vanguard - Low costs, client focused

    • Principal - This is what I personally use. I love the wepage,the wellness calcualtors, and how easy it is to manage investments

    • Fidelity - This is another great resource. Fidelity is ranked among the best investment choices out there.

  3. The next step involves being a bit of a visionary. You have to anticipate what things you will need to set aside money for. A vehicle, mortage insurance, prperty tax, weddings, college etc... You will need to start setting money aside for these things. Your best option is to have a direct deposit into these accounts so it's right off the top
  4. Save for your kids college. You get to decide how much your kids need to go to college. I personally never had the option of going to college. My family didn't have the money to pay for me. It's probably a good thing because I would have squandered it. If you don't have the money to pay for a full 4 year college for your kids, then just do your best, save what you can. One thing to consider is that your kids don't have to go to the most prestigious schools. State colleges are just as good and allow them to live closer to home and they can work while they are going to school.
  5. Pay your home mortgage off. This is usually the last debt that a person will pay off. In fact, I agree with Dave Ramsey's philosophy that a home mortgage is more of an investment. Most homes increase in value if they are taken care of and upgraded. It is possible to pay your mortgage to a lower value and then sell it for more money then you originally paid for it. What would it be like to own your home outright?
  6. Invest in yourself. Is there something that you have always wanted to do? Do you have a desire to start your own business? Now is the time to start working on it. The whole time you were paying off your debt is the time that should be used to develop your skills, hone your craft and increase your knowledge.
  7. Invest in others and give. A good rule is to give 10% of your income (gross or net, you decide) to a charity, church or organization. I give to Cedar Creek Church and my wife and I look for opportunites to bless other people. I give because of my relationship with Christ. He saved my life, so I use my life, talents, skills, and money to honor him.
  8. The final step is to share your knowledge, and experiences. If you are having success and have done something that can help someone out, then you should look for those opportunites. Our culture is into holding things close. Life is not about how much you can hang onto, but how much you can give, serve and love others.

That's a lot to take in, and there is not really a step by step guide or an action plan to go along with all of this. We will be creating a video course with worksheets and tools in the near future to rally help you put it all into practice.

In the meantime, don't be discouraged. Take heart. Remember I was $55,000 in debt and paid it off in 2.5 years, with a plan and focus. It really boils down to making a budget and sticking to it. Be laser focused on where every dollar is going. If you don't have the money to buy something, then you don't get it. It's not about what you can't buy, it's about the character that you will develop from going through it.



Did this help you? What are you doing to pay off your debt? What step are you on? Do you have a success story? We would like to hear from you.

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