Today I have the pleasure of introducing you to a great personal finance blogger. His name is Jacob Merkley and he has come up with his own method called the "debt destruction plan" to knock out over $16,000 in debt! You can usually find him over at Power Over Life where the motto is "life skills that put you in control". Read his article here about making New Year's resolutions and upping your game in your financial life. After that, head over to his site and check out some of the fantastic content that he provides!
Over the holidays, I listened to a favorite song of mine. While the music was playing, I started coming up with my own lyrics for the song. Those lyrics then morphed into what I am now deeming as my New Year's Resolution Poem. Check it out:
Candles have become mere wax,
And the decorations have been put in sacks;
The presents have now all been dispersed,
And now it's finally January 1st.
The ball drops magically in Times Square,
And we raise our voices into the air;
We shout with cheers for all to hear,
It's a time for hope to appear.
Yet even tho' there's magic in the air,
We all make goals without much care;
Even still, we try to keep them all year long,
The result? Oh well... and we skip along.
And all these goals I make today,
Are truly just wishes thrown away;
I won't work on them the way I should,
Because in the end, I didn't even think I could.
If you would like a printable copy of this poem to print out and put up where you can remember it, Click here to get the PDF version of the New Years Resolution Poem.
I believe those lyrics are quite telling of how many of us feel about New Year's resolutions. After the fanfare of Christmas and New Year's, we start the new year by going through the motions of creating goals that we never intended to keep. They are "just wishes thrown away" because we never really believed that we could achieve those goals in the first place.
If that rings true to you... just know that you aren't alone. I will raise my hand along with you as a guilty party!
A Possible New Year's Resolution
Last year, my wife and I had a New Year's resolution to become debt free by December 31, 2016. We had $16,000 worth of debt. For us, that $16,000 was crushing and we felt like we were drowning in the depths of debt.
Because of our brand new baby girl, we felt a surge of energy to get sobered up with our financial life. We wanted to provide a positive financial future for her (and our future children). We decided that we really wanted it and made a commitment to each other to achieve our resolution this time.
And we did! We became debt free in May of last year. It turns out that once we got serious about getting out of debt, we were able to get out rather quickly.
If you are in debt, I urge you to consider tackling your debt as this years' resolution! If you do, don't just make a "wish" that can be "thrown away". Promise yourself that you will take care of this huge problem...and yes, it is a problem!
How We Did It
After making our commitment to each other, we came up with our "Debt Destruction Plan". Last year, I wrote about that specific plan on my blog. Below is a condensed version of the steps we took to accomplish our 2015 New Year's resolution:
We decided to use the Snowball Method to get out of debt. There are quite a few methods out there, but we felt that the Snowball Method was the most advantageous to us. The reasoning is that we needed the extra psychological boosts that the Snowball Method is known for giving.
After picking the method, we listed out each of our debts in order, according to the way that the Snowball Method does it (If you ended up using a different method, list your debts in that methods' specific order).
Next, we worked on our budget. We worked on compressing our expenses and increase our savings each month. This step took a lot of work...but after analyzing how we were spending our money, we realized that we actually had a lot more that we could save each month.
Once we had worked on the budgeting piece, we started putting that lump of extra savings each month towards our debt, in a systematic approach. We paid the minimum payments on each debt, except for the first debt on our list.
After we finished off the first debt, we continued down the list by taking the minimum payment from debt #1 and added that amount into the extra funds that we had to pay our debts each month. We continued in this pattern until we had all of our debts paid off.
If you are struggling with debt and you also need to make a New Year's resolution for 2017, why not tackle both at the same time? Just imagine what being debt free would do for you and your family?! I'm willing to bet that your life would look a lot less stressful and way more fun!
I'll finish with this final excerpt from my article:
"Now that we are debt free, our world has changed! And I hope that your world can change too...Keep your head up and your shoulders back... be confident that you can get this done!"
I hope 2017 will prove to be a breakthrough year for your financial life. Cheers!