Hi there! You new here? We love that you found our little corner of the web. Here at Debt Free Guys, we’re all about helping people experience the freedom of becoming debt free! Would you love to feel that relief? After reading our article below, see how we can help you more here.
How to become debt free?
Have too much debt and don’t know where to start? Every fix takes too long or is too expensive. Here’s what we did to pay off $51,000 in under 3 years and helped others pay off $500,000+, so far. Pay off your debt faster and easier with the free, step-by-step, 7-Step Credit Card Debt Slasher here.
Becoming debt free is more than a list
Becoming debt free is more than a laundry list of dos and don’ts, which is what Google will find for you when you search “how to become debt free.” Yes, doing and not doing things such as:
- Cutting coupons
- Buying in bulk
- Shopping consignment
- Using tax refunds, bonuses and cash gifts to pay off debt
- Cutting the cable cord
- Selling your car
- Downsizing your home
- Acquiring no more debt
- Selling unwanted/unused items
- Stopping eating out so much
- Canceling monthly subscriptions
- Canceling gym and other memberships
- Downsizing your social life
- Cashing in life insurance to pay off debt
- Finding free and cheap entertainment
- Temporarily reducing or eliminating investing
- Quitting Facebook and Instagram
- Making your own coffee
- Earning more money with a new job, promotion or side hustle
- Canceling Amazon Prime
- Meal planning
- Increasing the monthly payments to your credit cards
- Cutting your credit cards
- Doing a spending freeze
- Negotiating lower interest rates
- Reducing time spent on social media – it makes you buy things
- Using a grocery list
- Using the library
- Making a budget
- Quitting Financial Peace University and signing up for the Credit Card Pay Off Plan
- Listening to the Queer Money® podcast
are all great ways to save money and put more money toward your debt to become debt free. But all these practical and tactical steps don’t tackle the real reason most – not all – people get into credit card debt.
For most of us, again not all, the reasons we get into credit card debt are limiting beliefs about who we are and what we’re worth. So, step #1 to become debt free is always, always, always . . . .
1. Adopting the mindset to become debt free
Designer clothes. Grand vacations. Homes in the choicest of neighborhoods. Happy hours that were all longer than an hour. Sound familiar?
Some say it’s the “gay lifestyle.” A while back, a young gay man asked in an FB group, “Why’s it so expensive to be gay?” We know what he’s talking about because we felt the same. Maybe you do, too?
Keeping up with gay money was making us two unhappy homos. We were the gay-cliché of looking fabulous but being fabulously broke – like those shacking up four boys in a two-bedroom apartment in L.A. but driving Beemers and Audis.
Sound familiar? Yeah. Us, too.
One night sitting on the dining room floor of our basement apartment, we said “Enough!” We were depressed and pissed because our debt was keeping us from the life we wanted – the life we pretended we had. We tried to fix it before but the fixing never worked. We couldn’t live that way anymore and knew something had to change.
We had to change. Maybe you want something different, too?
The first step for any change is changing your mind. There’s a big difference between wishing for change, believing you can change and taking action to make that change.
That’s why starting with changing our thinking was key.
2. Creating the vision to become debt free
Many of us can’t imagine a life without debt. Whether it’s student loan debt, credit cards or medical bills. Debt is a constant, but it doesn’t have to be.
When we got real about our $51,000 of credit card debt, we had to picture what a debt free life looked like. For example, we were paying $10,000 a year in interest to credit card companies. Stupid, right? We started picturing what we could do with that $10,000 rather than using it to subsidize the privilege of having debt.
It was FUN daydreaming. We talked about taking real vacations, ones that didn’t cause a credit card hangover. We talked about moving out of our basement apartment and buying a condo.
What would your debt free life look like? There’s freedom when you become debt free; you have more money and less stress. Can you visualize being debt free yourself?
3. Being friendly with the Benjis
As Macklemore sang in Thrift Shop, “Only got $20 in my pocket, I’m, I’m, I’m hunting. This is f*cking awesome.” You can have a lot of fun when you know where the f*ck your money’s coming from and where it’s going.
Knowing where you are and where you want to be, gives you a roadmap for making it happen. When we chose to become debt free we needed that roadmap, otherwise, Sunday Funday, poppin’ bottles at happy hour and that Amazon addiction would remain the path of least resistance – especially with Visa and Master Card never saying “No.”
Another great thing about the Benjis is that we now spend with a purpose. What brings you true joy, not temporary happiness? Not a slight buzz from a couple of cocktails-happy?
What makes you smile days or weeks later? Spend your money on that and use this plan to create that.
4. Having the audacity to do it
Think about your last amazing, first date. How did it happen? I’m not talking about logistics. Some of those are too personal to share, except maybe on Grindr or Scruff.
Think back to how it began, though. Who asked who? Which one of you had the courage to ask the other out? After that date, weren’t you happy? (insert mischievous grin)
The same goes for your money. It’s not a marriage. So, use this simple plan to start becoming debt free.
Your wallet, your husband – future husband – will thank you. Cuz there ain’t nothing sexier than a man with his shit together. And that shit includes your money.
Speaking of your main man, did you know that couples who talk about money have better sex? Hear all about that and four other tips for managing your money together as a couple on this Queer Money.
5. Doing it smart to become debt free fast
Most people who Google ways to become debt free often land on something written by one of Dave Ramsey’s staff writers. Ramsey’s a superfan of the Debt Snowball Method to pay off debt. The Snowball Method says to focus on paying off your credit card with the smallest balance first (with extra money, bonuses, gift money, tax refunds, etc) while making minimum monthly payments to all your other cards. Once you’ve paid off that card with the smallest balance, work on paying off the card with the next smallest balance.
The Snowball Method will give you initial, quick wins. It’ll also cost you more money in the long run, as it’s the least fiscally responsible method. Listening to Dave Ramsey’s show or buying Financial Peace University also brings with it a bunch of religious baggage that lots of folks don’t want – but, hey, “don’t cram your lifestyle down my throat and all!”
The next most popular method, the more fiscally responsible of the two, is the Avalanche Method. It says to focus on paying off your credit card with the highest interest rate first while making minimum monthly payments to the rest of your cards. Of the two, the Avalanche Method will save you more money over time. It’s just that it takes forever to pay off all your debt.
When we looked at either method to pay off our $51,000 in credit card debt, we estimated that it would take us between 5 – 8 years to become debt free. Who has that kind of patience? Not us!
So, we looked at what was making becoming debt free take so long. Can you guess?
It was the high credit card interest rates. Some credit cards charge over 22% in interest. So, we created our Debt Lasso Method.
6. Lassoing your debt to become debt free
The Debt Lasso Method says to rein in your debt to as few locations as possible with the lowest interest rate as possible, ideally 0%. This is most easily achieved with 0% interest rate credit card balance transfer offers. Low-interest personal loans or loans from friends and family are other options, though we’re not super fans of the latter two.
There are 5 total steps to the Debt Lasso Method to make it super-effective:
- Commit to stop using your credit cards
- Commit to paying more than the minimum monthly payment each month
- Immediately trim or pay off any cards that can be paid within a month or two months
- Lasso your debt into as few locations as possible with the lowest interest rates possible
- Automate credit card payments focusing on paying more than the minimum on your credit card with the highest interest rate
- Make sure you never miss a payment and adjust your payments as you pay off credit cards
More tools for becoming debt free: