3 steps I took to pay off 46k of debt and hit 100k net worth
It can be a little overwhelming on the outside looking in when someone says how much debt they have paid or what their current net worth is.
One thing we need to do is destigmatize those conversations, but that’s a blog for another day.
Another thing we need to do is to talk about ways to change your situation even if you can not immediately change your income.
Here are 3 steps I took to pay off $46k of debt and built a $100k net worth.
1. Create awareness of your financial situation.
It is so easy to make sure you are paying your minimums on time without having a full look at everything involved with your money. Do you know how much all your debt is when added up? Do you know your current net worth? What are your financial goals for the next year? Next 5 years? Next 10?? Is your income enough to make those goals come to fruition? If so, are you doing what you need to in order to meet those goals? If you are not bringing in enough money, what needs to happen to meet those goals?
“Become aware of where you are financially and where you are trying to go. The trip is a little easier with a plan.”
2. Pay yourself first, and automate it (this includes savings, investing and debt payments)
Pay yourself first. This may look different at varying stages of your journey.
Paying yourself may look like adding money to your savings, your investment accounts or making debt payments to become debt free.
You work hard, make sure that money is working to get you where you are trying to be financially.
Once you budget how much you pay yourself, automate it! If you know you can send an extra $150 to debt a month, set it up so that you pay it automatically when you are paid. Out of sight, out of mind.
This does not mean to lose awareness of your financial situation, but rather to have your money come in and go right out because you have committed to your goals.
3. Know your values and how that relates to spending your money
What matters to you? Do you want to pay down your debt? Do you want to invest your money?
Setting goals and automating them is part of the battle, but you need to also self-reflect and make sure you setting goals that YOU want and using your money in a way that aligns with YOUR values.
You may need to learn that you must take in some areas in order to give in others. For instance, is your passion traveling, but you spend loads of money for things you do not truly value at Home Goods but those are the only funds allocated spending, make sure you are spending it in a way that truly resonates with your values.