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Baby Steps to Managing Your Debt

I want to talk about that evil four letter word that sinks stomachs everywhere.

The thing that elicits perpetual discomfort and anxiety out of almost everyone.

You know that thing that sits at the back of your mind.

The thing you’re reminded of every time you swipe your debit or credit card.

You know exactly what I’m talking about.


Wait don’t click out yet.

We can get through this. Together.

If you haven’t read my first blog here at The Working Millennial, I’ll give you time to catch up.

Don’t worry I’ll wait.

If you have, we can proceed.

Assuming you’ve followed through on lesson one and two, at this point you should know all your debts. As scary as that is at least its done.


Pick the category that fits you best below, don’t lie either…you’re only cheating yourself.

Level 1: Spendy.(Some debt, nothing major under 10k)

If you’re here that may mean you have probably picked up some bad habits recently or you make enough income to cover some of your bad choices but not all. You’re probably making enough to cover your bills and pay some of your debt in small portions but not big chunks.

Level 2: SPENDY spendy(Over 10k but below 20k, maybe a car loan, credit card debt and/or low student loans)

If you’re here that may mean you have bad habits, luck or constantly find yourself in sticky situations that have gotten you in over your head. You’re probably paying your bills and making your minimum payments but the debt is building up and making it hard to stay afloat.

Level 3: SPENDY SPENDY SPENDY(Over 20k, probably a car loan, a few maxed credit cards and a chunky student loan)

If you’re here that may mean you have bad habits and up until now “Ignorance is bliss” has been your life mantra. You’re drowning in your debt, barely making minimum payments, late on most bills and struggling to get by monthly.

No judgement.

There come times in life when you look at what your doing, what it’s producing, and the only thing you know is… “This ain’t working.”

I’m hoping you’re here to do the hard work, but these questions remain. What are you working for? What comes next? What kind of habits are you working to form to keep you in the place you want to be?

I feel that answering those questions is paramount to your success in reducing or ridding yourself of debt. When we get stuck in our bad habits we leave no room for change, so make the room and break the habits. I genuinely believe there is no “tip or trick” that can save you with your debts, just good old fashion hard work.

Now for some application.

First thing’s first you need to have a budget. You need to make your budget monthly even if you have bills that don’t change, not every month will be the same. Lastly you need to budget every last dollar of money coming in. A saying goes “Every dollar has a home.”

When it comes to getting out of debt, Dave Ramsey and his baby steps have proven to be one of the best way to go.

While you can find his baby steps here. The one’s I want you to concern yourself with currently are:

Step 1: Create an emergency fund: I feel as though $500-$1000 will suffice depending on what you responsible for, when in debt more is always better. This is important because I can almost guarantee that while we can budget down to the last dollar, life always happens. This allows you to have a buffer for unexpected events.

Step 2: Use Dave Ramsey’s debt snowball: It says to line up your debts smallest to largest and tackle them in that same order. Paying off all debts except the house.

Step 3: Your fully funded emergency fund. This is 3-6 months of your income.

Dave Ramsey was kind enough to pen what I believe is the simplest most basic way to get out of debt slow and steady. No magic tricks and certainly no get rich quick scheme’s. Just good old fashion’d hard work. Sacrifice is necessary when there is a bigger picture, whatever that bigger picture is for you. There seems to be a wide spread notion that debt is normal. I’m here to tell you that it doesn’t have to be.

Until next time,


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