Get Debt Free~ Free Up Extra Cash For Debt Repayment!

We first began our "debt free journey" 3 years ago this month.  We made a commitment to get debt free asap. I mainly made the commitment. My husband wasn't fully onboard yet :) At the time we were looking at almost $27,000 in credit card debt, $31,000 in student loan debt and two auto loans, which cost us over a thousand bucks in payments every month. That didn't even include our mortgage and regular bills.  Fast forward to today and it's all gone except for the mortgage.  We have a small furniture bill to pay (to be paid in full this month) and then we will only have a mortgage payment. I am now committed to increasing our emergency fund and paying off the house. 

There are a few sideline goals that I have for 2011. They include:

• Increasing our life insurance policies (we both have them at work, but would like to increase them).
• Starting 529 college funds for the twins (getting hit with paying for 2 to go to college simultaneously would be rough without a generous savings plan so we need to get a jump on it). 
• Starting and funding a Roth IRA.

I hope since the beginning of the year you have all been thinking about improving your family's financial future in 2011.  I have gotten quite a few emails from many of you and I LOVE to hear about your progress.  I thought it would be beneficial to list some ways that you can add extra cash to your debt repayment in order to speed up the process and get you "debt free" as quickly as possible.  Here is a list of the things that I did and am continuing to do as we continue to strive to become completely debt free:

• If you are new here, read this post and get on board our debt free wagon :)  If you are a regular reader you know that the main point that I focus on is INTENSITY.  This is key when attempting to change your life.  You must be focused on your goal or you won't accomplish it.  When you save money at the store or get any unexpected money (overtime, rebate, tax return, check from the in-laws etc...) set it aside to pay down the first debt on your list (remember to list your debts from lowest to highest and then attack the first one until paid and move on down your list).  Even if it's as silly as a $3 check, set it aside to use towards a bigger payment.  When you add up this "little money", it ends up being bigger than you think.  Be intense!
• Question your purchases! Do you really NEED it? Or do you want it? Do you want it more than getting debt free? Ask yourself!
• Start looking at your expenses. Look over the last 3 months of bank statements.  Do you have a gym membership that you aren't using? Cancel it and walk around the block a few times.  Do you have a Netflix membership? Cancel it and use the free movie codes I post.  Do you pay extra for movie channels? Evaluate whether they are more important than getting debt free.  Probably not!  You can probably trim your budget quite a bit when you cut out all of the extras!
• Next you need to call each utility about your bill and see if you can reduce the amount you are paying. When you call the cable company, I’ve found I have better luck at reducing the bill if I talk with the cancellation department instead. Be sure to eliminate any channels you don’t need! Call the cell company and see if you are eligible for any additional discounts. They are getting to de-regulate electricity so I am starting to think about switching electric companies. I've heard you can save as much as 15%.
• Now if you were able to reduce or eliminate any of the bills, I want you to earmark the money you saved for your debt repayment. Yes, this is kind of coming out of your monthly income, however you wouldn’t of taken this initiative and would be paying the higher prices if it wasn’t for debt repayment. So I call this found money! Make sure you make a point to put this money into debt repayment every month. Don’t forget or it will just be absorbed into oblivion.
• Make a list of all of your expenses. I even estimate on the higher side.  I may budget for $250 for electricity because it costs that in the winter so when it's lower I use the extra for debt repayment.  Add everything into your list including gas, groceries and all of life's other little expenses.  When you do that and subtract it from your income you can see how much money you will have to start your debt repayment.  The first month (after you have saved your $1000 baby emergency fund) use your debt repayment money to attack the first debt on your list until it's gone.  Then move on down your list. 
• Think of ways to boost your income so that you can speed up the process! I have sold tons of things on Craigslist and Ebay, had yard sales, done surveys and mystery shopping just to name a few things.

Send me a note or comment to let me know how much money you "found" and what bills you are getting rid of! It's motivational when you have a support system.